I  li    il 


i!   piliiiii 


II! 


i    i     ill! 


liii 


II 


I    !1 


CO 


I 


mm 


il  il 


!i!l 


il  i  illii! 


!i       1  !i 


Z) 


of  laea 


Two  hundred  fifty  copies 
printed  for  sale 


A  l^tHtorg  of  tl|? 

nf  laea 


BY 

JOHN  WILLIAM  PERRIN,  Ph.   D. 

LIBRARIAN  OF  CASE  LIBRARY 


Pritiatplg  tirintrd  far  tt|r  atttl^or.    War  eaU  bQ 

iLiit  Artlfur  %  (Elark  (EomfimtQ 

OlUtirlanb:  1914 


COPYRIGHT,    1913,    BY 

JOHN  WILLIAM  PERRIN 


[IV] 


TO 

HERBERT,  HARRIET,  and  EVERETT 


CONTENTS 


Commissioners  of  the  Fund 

I  Aa  of  the  General  Assembly  creating  the  Fund 

II  The  Origin  of  the  Fund 

III  The  Organization  of  the  Board  of  Commissioners 

IV  The  Growth  of  the  Fund,  1863-1880 

V  The  Fund  and  its  Use,  1880-1890 

VI  The  Fund  and  its  Use,  1890-1900 

VII  The  Fund  and  its  Use,  1900-1913 
Appendix  .... 


4 
5 

8 

13 
16 

24 
34 
52 
66 


31368± 


COMMISSIONERS  OF  THE  SINKING  FUND  OF  1862 


Henry  B.  Payne 

Franklin  T.  Backus 

William  Case 

Moses  Kelley 

William  Bingham 

Charles  Hickox,  successor  to  William  Case 

Leonard  Case,  successor  to  Franklin  T.  Backus 

J.  H.  Wade,  successor  to  Moses  Kelley 

Sylvester  T.  Everett,  successor  to  Leonard  Case 

William  Edwards,  successor  to  Charles  Hickox  . 

James  Barnett,  successor  to  J.  H.  Wade 

Andrevi^  Squire,  successor  to  Henry  B.  Payne 

Samuel  E.  Williamson,  successor  to  W.  B.  Edwards 

Charles  F.  Brush,  successor  to  S.  E.  Williamson 

Charles  W.  Bingham,  successor  to  William  Bingham 


1862 


1862-1896 
1862-1870 
■April  19,  1862 
1862-1870 
1862-1904 
1862-1890 
1870-1880 
1870-1890 
1880-1913 
1890-1898 
1890-1911 
1896-1913 
1898-1903 
1903-1913 
1904-1913 


PRESIDENTS    OF   THE    COMMISSION 


Henry  B.  Payne 
William  Bingham 
James  Barnett     . 
Charles  W.  Bingham 


1862-1896 
1896-1904 
1904-1911 
1911-1913 


SECRETARIES    OF   THE   COMMISSION 


D.  H.  Beardsley 
H.  C.  Hawkins 

E.  W.  Brink      . 


1862-1869 
1869-1909 
1910-1913 


ACT  OF  THE  GENERAL  ASSEMBLY  CREATING  THE  FUND. 

The  Sinking  Fund  of  1862  was  created  by  an  act  of  the  General 
Assembly  passed  March  28  of  that  year.^  This  act  set  apart  certain 
"railroad  shares  and  bonds,"  and  "any  assets  going  out  of  the  same," 
then  owned  by  the  city,  and  in  the  hands  of  commissioners,  as  the 
basis  of  a  fund  for  the  redemption  of  the  principal  of  the  Water 
Works  bonded  indebtedness.^  This  indebtedness,  however,  was  to  be 
paid  in  conformity  with  the  provisions  of  Article  Six  of  The  Terms 
of  Annexation  between  the  City  of  Cleveland  and  the  City  of  Ohio 
agreed  upon  by  the  commissioners,  June  5,  1854.^  Article  Six  of  the 
Terms  of  Annexation  provided  that  "All  railroad  stocks  now  held  by 
the  City  of  Cleveland,  and  all  rights  growing  out  of  the  ownership 
thereof,  and  of  such  as  have  heretofore  been  owned  by  said  City  of 
Cleveland  shall  be  and  remain  the  exclusive  property  of  that  portion 
of  the  territory  of  such  united  city  which  now  constitutes  the  City  of 
Cleveland,  the  avails  of  which  shall  be  applied  to  the  extinguishment 
of  the  liabilities  of  said  City  of  Cleveland,  heretofore  incurred  by  sub- 
scriptions to  railroad  stocks,  and  the  issue  of  bonds  or  other  liabilities 
of  said  City  of  Cleveland,  in  payment  of  such  subscriptions.    Should 

1  Ohio  Laws  (Columbus,  1862)  pp.  126-128. 

*  As  early  as  June  25,  1833,  the  General  Assembly  had  passed  an  act 
incorporating  "Philo  Scovill  and  his  associates"  as  the  "Cleveland  Water 
Co."  The  capital  stock  was  to  be  twenty-five  thousand  dollars  "to  be 
divided  into  shares  of  fifty  dollars  each." — Report  of  the  Committee 
appointed  by  the  Common  Council  of  the  city  of  Cleveland  on  the  Subject 
of  a  supply  of  Pure  Water.  (Cleveland:  Plaindealer  Steam  Press,  1853). 
The  committee  making  this  report  consisted  of  William  Case,  W.  J. 
Warner,  J.  P.  Kirtland  and  Charles  Whittlesey.  Their  report  was  exhaust- 
ive. It  is  included  in  Vol.  1  of  the  Annual  Repdrts  of  the  Cleveland 
Water  Works. 

Nothing  was  done  under  the  Act  of  1833,  On  March  19,  1850,  an  act 
of  amendment  was  passed  by  the  General  Assembly  which  increased  the 
capital  stock  to  one  hundred  thousand  dollars,  and  made  the  provisions  of 
the  original  act  "apply  to  and  embrace  the  corporate  limits  of  the  City  of 
Cleveland,  and  County  of  Cuyahoga  as  fully  and  explicitly  as  the  provisions 
of  said  act  are  declared  in  the  same  to  apply  to  and  embrace  the  corporate 
limits  of  the  village  of  Cleveland,  and  County  of  Cuyahoga."     (Ibid.) 

In  this  same  year,  1850,  William  Case  became  Mayor.  His  administra- 
tion was  both  able  and  energetic;  and  under  his  leadership  the  corporation 
took  hold  of  the  matter.  After  much  discussion,  and  when  many  surveys 
and  estimates  had  been  made,  a  plan  was  adopted  in  1854.  To  carry  this 
out,  the  General  Assembly  on  May  1,  of  that  year  passed  an  act  by  which 
the  city  was  given  authority  "to  locate  its  reservoirs  and  make  its  connec- 
tions with  the  lake  within  the  City  of  Ohio."  "The  act  also  authorized  the 
city  to  make  a  loan  of  $100,000  to  carry  out  the  project."  This  loan,  how- 
ever, was  conditioned  "upon  a  vote  of  popular  approval  which  was  given." — 
Corporate  Birth  and  Growth  of  Cleveland.  By  Hon.  S.  O.  Griswold. 
Annals  of  the  Early  Settlers  Association  of  Cuyahoga  County,  Vol.  1, 
Number  V. 

'  Section  1  of  Act  creating  the  fund. 


6  History  of  the  Cleveland  Sinking  Fund  of  1862 


a  surplus  remain,  after  the  application  of  so  much  of  the  last  named 
asset  to  the  extinguishment  of  said  named  liabilities  as  shall  be  nec- 
essary for  such  purpose,  such  surplus  shall  be  appropriated  to  the  spe- 
cial benefit  of  said  territory  now  composing  the  City  of  Cleveland, 
either  by  the  purchase  of  public  parks  therein,  or  in  such  other  manner 
as  a  majority  of  Trustees  representing  such  territory  shall  direct. 
Should  it  ever  be  necessary  to  resort  to  other  means  to  take  care  of 
said  liabilities,  the  amount  necessary  for  such  purpose  shall  be  raised 
by  a  tax  upon  the  property  embraced  in  such  territory  exclusively." 

The  custody  and  management  of  the  fund  was  given  to  a  board 
of  five  commissioners*  who  "beyond  the  necessary  expenses  incurred 
by  them  in  the  discharge  of  their  duties"  were  to  receive  "no  salary 
or  compensation  for  their  services,"'*  As  a  guarantee  for  the  faithful 
discharge  of  their  duties,  the  commissioners  were  required  to  give 
bond  approved  by  the  Mayor,  and  in  such  amount  as  he  might  "from 
time  to  time  determine."" 

They  were  required  to  keep  a  register  of  all  "stocks,  shares,  bonds, 
and  moneys  in  a  book  prepared  for  that  purpose,  showing  the  dates, 
numbers,  and  amounts  thereof,  the  corporation  or  corporations  in 
which  the  same  are  invested,  or  from  whom  payable,  the  time  payable, 
the  annual  or  semi-annual  interest  or  dividends  accruing  on  the  same, 
and  when  said  interest  or  dividends  are  payable,  and  when  the  same  is 
paid,  and  all  such  other  matters  and  things  as  will  fully  show  the 
true  amount  and  condition  of  said  fund."^  This  register  was  to  be 
open  at  all  times  for  examination  by  the  Mayor  or  City  Auditor;  and 
on  the  first  Tuesday  in  April  of  each  year,  the  commissioners  were 
required  to  make  "a  full  and  accurate  report  of  the  condition  and 
amount  of  said  fund"  to  the  City  Council.* 

The  law  also  made  it  the  duty  of  the  commissioners  to  vote  all 
stocks  belonging  to  the  fund  "at  any  meeting  of  stockholders  of  any 
corporation  in  which  said  stocks  may  be  held" ;  to  "immediately  invest" 
all  interest  and  dividends  received  "in  safe  and  reliable  stocks  and 
bonds,  or  loan  the  same  upon  adequate  real  estate  security  on  such 
time"  as  their  judgment  may  deem  "for  the  best  interest  of  the  City."' 
They  were  given  power,  too,  with  the  consent  of  the  City  Council,  "to 
sell  and  dispose  of  any  of  said  stocks,  shares  and  bonds  for  cash,  and 
to  invest  the  proceeds  thereof  in  other  stocks,  or  in  such  other  manner 
as  they  shall  consider  to  be  for  the  interest  of  the  City,  and  shall, 
when  the  aforesaid  Water  Works'  debt  shall  become  due,  or  any 
part  thereof,  sell  such  stocks,  shares  and  bonds,  or  such  portion  as 
may  be  necessary  for  cash,  and  apply  the  proceeds  thereof  in  payment 
of  said  Water  Works'  debt  as  contemplated  by  Section  one  of  this 
Act."^° 


*  Section  1. 
'  Section  7. 

•  Section  5. 
'  Section  2. 

'  Ibid.    The  fiscal  year  was  afterwards  made  to  begin  January  1. 

®  Section  3. 

1°  Section  4.    This  section  was  amended  in 


History  of  the  Cleveland  Sinking  Fund  of  1862  7 

Henry  B.  Payne,  Franklin  T.  Backus,  William  Case,  Moses  Kelley, 
William  Bingham,  "and  their  successors"  were  named  as  commission- 
ers. In  case  of  the  death,  resignation,  or  removal  from  the  county  of 
any  commissioner,  or  of  a  vacancy  in  the  Board  for  "any  other  cause, 
excepting  removal  from  office  by  the  Common  Pleas  Court,"  the  re- 
maining commissioners  were  given  power  to  choose  a  successor  and 
to  give  him  a  certificate  of  appointment  subject  to  the  approval  of 
the  City  Council."  If,  however,  a  commissioner,  or  commissioners, 
should  be  removed  from  office  by  the  Common  Pleas  Court  because 
of  malfeasance,  misconduct,  or  neglect  of  duty,  then  it  became  the 
duty  of  the  Court  "to  appoint  some  other  suitable  person  or  persons 
to  fill  the  vacancy  or  vacancies  thus  created. "^^  The  act  both  author- 
ized and  required  the  special  commissioners,  appointed  by  the  Gen- 
eral Assembly  in  1846,  1849  and  in  1851  to  subscribe  in  the  name  of 
the  City  to  the  capital  stock  of  the  Cleveland,  Columbus  and  Cincinnati, 
the  Cleveland  and  Pittsburg,  and  the  Cleveland,  Painesville  and  Ash- 
tabula Railroad  Companies  to  transfer  "all  stocks,  shares,  bonds, 
credits  and  moneys  and  other  assets"  owned  by  the  City,  and  in  their 
hands,  to  the  Sinking  Fund  Commissioners."  The  Act  was  made 
effective  and  "in  force  on  and  after  its  passage."" 


^^  Section  5. 
**  Section  6. 
*'  Section  8. 
"  Section  9. 


II. 

THE  ORIGIN  OF  THE  FUND. 

The  first  railroad  corporations  of  Ohio  appealed  with  remarkable 
success  to  the  local  political  units  of  the  State  for  aid  in  the  establish- 
ment of  their  roads.  Prior  to  September  1,  1851,  they  had  sold  to 
them  $5,635,500  of  their  capital  stock  of  which  $4,128,000  was  taken 
by  counties,  and  $1,507,500  by  cities,  towns  and  townships.  The  stock 
was  to  be  paid  for  by  interest  bearing  bonds  issued  by  the  corpora- 
tion purchasing  the  stock.  Up  to  this  same  date,  September  1,  1851, 
the  counties  of  the  State  had  paid  $3,963,165.86  on  the  bonds  issued 
in  payment  of  the  stock.  They  had  received  $181,470.78  in  dividends, 
and  had  realized  $738,300.33  from  stock  sold.  The  cities,  towns,  and 
townships  had  paid  $1,342,993.94  on  the  stocks  purchased.  They  had 
received  $1,762.50  in  dividends  and  $228,240.60  for  stock  sold." 

The  City  of  Cleveland  made  subscriptions  to  the  stock  of  three 
roads.  The  first  was  authorized  by  an  act  of  the  General  Assembly, 
February  24,  1846.  This  act  named  Zalmon  Fitch,  John  M.  Woolsey, 
Richard  Hilliard,  Samuel  Williamson  and  Dudley  Baldwin  special 
commissioners  to  subscribe  in  the  name  of  the  city  for  not  more  than 
$200,000  of  the  capital  stock  of  the  Cleveland,  Columbus  and  Cincinnati 
Railroad  Company.^**  To  pay  for  the  stock,  the  commissioners  were 
empowered  to  issue  interest  bearing  "bonds,  scrip,  or  other  contracts 
in  proper  form."  The  interest  was  to  be  paid  annually,  and  the  bonds 
were  to  mature  in  "not  less  than  ten  years  after  the  date  of  the  sub- 
scription." It  was  also  stipulated  in  the  act  that  all  avails  derived  from 
the  sale  of  stock  should  be  held  for  the  payment  of  the  "bonds,  scrip, 
or  other  contracts,"  and  be  subject  to  no  other  liability  of  the  city  "so 
long  as  such  bonds,  scrip,  or  other  contracts  shall  remain  unpaid.^^ 
The  commissioners  were  required  to  keep  a  record  of  all  indebtedness 
issued  by  them,  and,  within  six  months  after  such  indebtedness  was 
contracted,  to  file  a  copy  of  the  record  with  the  City  Council.  On  or 
before  the  first  Monday  in  June  of  each  year,  too,  they  were  required 
to  report  to  the  County  Auditor,  the  amount  of  principal  and  interest 
to  be  paid  in  the  following  year,  any  deficiency  then  existing,  and  the 
dividends  and  proceeds  expected  from  the  sale  of  stock.^* 

The  commissioners  purchased  $100,000  of  the  stock  for  which  the 
railroad  company  agreed  to  accept  the  same  amount  of  city  bonds  at 


"  Annual  Report  of  the  Auditor  of  State  for  1873.  See  Table  XXV., 
P.  269-271.  This  gives  the  amount  of  stock  subscribed  for  each  county, 
city,  town,  and  township  within  each  county,  of  the  State,  prior  to  Sep- 
tember 1,  1851.  It  also  gives  for  each  county,  city,  town  and  township,  the 
amount  of  interest  paid  upon  the  bonds  issued  for  the  stock;  the  dividends 
received;  and  the  proceeds  derived  from  stock  sold. 

le  Laws  of  Ohio,  Vol.  44,  pp.  167-170. 

17  Section  1  of  Act. 

IS  Section  1. 


History  of  the  Cleveland  Sinking  Fund  of  1862  9 

par.  Nearly  two  years  later,  April  1,  1848,  the  bonds  were  issued." 
They  bore  interest  at  six  per  cent,  and  were  to  mature  in.  1859.  Just 
one  year  later,  April  1,  1849,  the  commissioners  made  a  second  issue 
of  bonds  for  the  purchase  of  an  additional  $100,000  of  stock.  This 
purchase  was  made  at  exactly  the  same  rate,  and  on  the  same  time, 
as  the  first.  As  the  road  was  not  completed  until  1851  there  could  be 
no  dividends  until  after  that  time.  To  take  care  of  the  accruing 
interest  on  the  bonds,  the  city  in  1848,  1849  and  1850,  made  tax  levies 
of  $6,800,  $5,000  and  $13,000  respectively.  With  the  exception  of 
these  levies,  and  the  loan  of  its  credit  for  $200,000  of  bonds  issued  for 
that  amount  of  capital  stock,  the  city  gave  no  other  equivalent  to  the 
railroad.  At  maturity,  the  bonds  were  paid  from  dividends  received 
from  the  stock,  and  a  surplus  of  $140,833.70  was  left  in  the  hands 
of  the  commissioners.  In  November,  1859,  $114,606.41  was  paid  by 
the  commissioners  to  redeem  $100,000  of  bonds  with  deferred  interest 
issued  for  that  amount  of  stock  in  the  Cleveland  and  Pittsburgh  Rail- 
road Company.  The  balance,  $26,277.29,  was  turned  over  to  the  Sink- 
ing Fund  Commissioners,  May  3,  1862,  in  a  note  of  the  City  of  Cleve- 
land bearing  interest  at  six  per  cent.  After  deducting  from  the  sur- 
plus, $140,833.70,  the  amount  of  the  tax  levies^"  made  between  1848 
and  1851  to  pay  the  interest  on  the  bonds,  there  remained  to  the  city 
a  net  gain  of  $116,033.70.  In  other  words,  the  city  gained  that  amount 
between  1848  and  1862  with  no  other  asset  than  its  credit.  In  the 
Second  Annual  Report,  the  Directors  of  the  road  give  an  account  of 
this  transaction  from  the  standpoint  of  the  railroad  company.''^  In 
their  third  report  it  is  stated  that  both  "Cleveland  and  Columbus  cities 
then  at  the  lowest  stage  of  depression,  came  into  the  work  with  hesi- 
tation and  reluctance."  As  to  the  gains  resulting  from  the  transaction 
the  report  adds:  "It  (the  railroad)  has  profited  every  one  who  has 
invested  in  its  stock  or  its  bonds;  it  has  duplicated  the  wealth  of  the 
country  which  it  penetrates,  and  trebled  that  of  the  two  flourishing 
cities  which  it  connects."" 

TABLE  I 

Showing  Result  of  Investment  of  the  City  of  Cleveland  in  the  Cleve- 
land, Columbus  and  Cincinnati  Railroad  Company. 

Expense : 

City  Bonds  issued $200,000.00 

Interest  on  same  for  1848,  1849  and  1850 24,800.00 

Total  outlay   $224,800.00 

Receipts: 

City  Bonds  issued  for  C.  C.  &  C.  R.  R.  stock  (Paid  by  the 

Railroad  Company)    $200j000.00 


^^  The  negotiable  value  of  the  bonds  at  this  time  was  88  per  cent 
but  were  accepted  by  the  road  at  par  as  stipulated  at  the  time  of  the  pur- 
chase of  the  stock.     Supra  8. 

20  The  total  of  the  three  levies  was  $24,800, 

2'  Second  Annual  Report  of  the  Directors  of  the  Cleveland,  Columbuf 
and  Cincinnati  Railroad  Co.,  January  12,  1853,  p.  5, 

22  Third  Annual  Report  (Ibid)  p.  9. 


10 History  of  the  Cleveland  Sinking  Fund  of  1862 

City  Bonds  issued  for  C.  &  P.  R.  R.  stock,  with  deferred  in- 
terest, paid  by  dividends  from  the  C.  C.  &  C.  R.  R 114,606.41 

City  note  turned  over  to  Sinking  Fund,  May  3,  1862 26,277.29 

Total  receipts   $340,883.70 

Outlay    224,800.00 

Net  gain   $116,083.70 

The  second  investment  of  the  city  was  in  the  Cleveland  and 
Pittsburgh  Railroad  Company.  This  was  authorized  by  an  act  of  the 
General  Assembly  passed  February  16,  1849.=^'  Moses  Kelley,  Elisha 
Sterling,  Philo  Scovil,  Henry  W.  Clark  and  Harvey  Rice  were  named 
as  special  commissioners  to  purchase  $100,000  of  the  stock.  However, 
before  the  purchase  could  be  made  the  act  required  that  the  question 
be  submitted  to  the  legal  voters  of  the  City.^*  This  was  done  on  April 
4,  of  that  year.  The  vote  stood  1,157  in  favor  of  the  purchase  to  27 
against.'^'  The  stock  was  purchased,  but  as  the  records  of  the  special 
commissioners  are  now  lost,  it  is  impossible  to  give  details  of  the  trans- 
action. The  first  annual  report  of  the  commissioners  to  the  City 
Council  shows  that  $100,000  of  the  city  bonds  were  issued  with  which 
to  purchase  the  stock.  The  bonds  bore  date  of  November  1,  1849, 
and  were  to  mature  in  ten  years. 

The  first  years  of  this  road  were  not  prosperous.  It  struggled  for 
years  under  influences  so  depressing  that  it  was  not  until  long  after 
the  stock  was  turned  over  to  the  Sinking  Fund  Commissioners  and 
sold  by  them  that  a  better  and  more  prosperous  era  began.  As  late 
as  1860,  the  stock  had  little  more  than  a  nominal  value;  and  in  1862 
the  city  council  authorized  its  sale  at  twenty-five  per  cent  of  its  par 
value.'^'  Notwithstanding  these  adverse  conditions  the  interest  on  the 
bonds  continued.  This  in  the  ten  years  from  the  date  of  the  issue 
of  the  bonds  until  1859,  when  they  matured,  amounted  to  $66,000. 
The  Cleveland  and  Pittsburgh  Railroad  paid  $8,200  of  this  from  the 
sale  of  stock  dividends ;  $14,606.41  was  paid  by  the  Cleveland,  Colum- 
bus and  Cincinnati  Railroad  ;^^  and  the  balance,  $37,193.59,  was  raised 
by  tax  levies  on  the  first  four  wards  of  the  city.^*  On  May  10,  1862, 
the  commissioners  turned  over  the  stock  to  the  Sinking  Fund.  The 
transaction  was  anything  but  advantageous  to  the  City.  At  the  time 
of  the  transfer  of  the  stock  to  the  Sinking  Fund  Commissioners,  the 
cash  avails  received  by  the  City  from  the  road  were  the  $8,200  for 
interest  on  the  bonds. 


2'  Laws  of  Ohio,  Vol.  47,  pp.  146-149.  The  provisions  of  the  act  were 
in  the  main  the  same  as  in  the  act  authorizing  the  purchase  of  stock  in  the 
Cleveland,  Columbus  and  Cincinnati  Railroad.     Supra,  p.  8. 

2*  Section  of  act. 

20  Daily  Herald  (Cleveland)  April  4,  1849. 

2«P.  16. 

27  See  Table  I.     Supra,  p.  9. 

28  This  was  in  accord  with  the  terms  of  annexation  between  the  City  of 
Cleveland  and  Ohio  City.    See  p.  5. 


History  of  the  Cleveland  Sinking  Fund  of  1862  11 

TABLE  II 

Showing  Result  of  Investment  of  the  City  of  Cleveland  in  the  Cleve- 
land and  Pittsburgh  Railroad  Company 

Expenses : 

City  Bonds  issued $100,000.00 

Interest  on  same  from  1849  to  1859 60,000.00 

Total   outlay    $160,000.00 

Receipts: 

Payment   of  interest  from  sale  of   stock   dividends  by  the 

C.  &  P.  R.  R 8,200.00 

Total  receipts   $    8,200.00 

Difference  between  expenditures  and  receipts $151,800.00 

Late  in  1862,  the  Sinking  Fund  Commissioners  sold  the  stock  of  this 
road  for  $42,937.50  which,  deducted  from  the  above,  gives  $109,262.50  as  the 
net  loss  to  the  City  from  the  transaction. 

The  third  venture  of  the  City  was  a  subscription  for  $100,000  of 
the  capital  stock  of  the  Cleveland,  Painesville  and  Ashtabula  Railroad. 
It  was  authorized  by  an  act  which  passed  the  General  Assembly,  Feb- 
ruary 13,  1851."  Melancthon  Barnett,  Hiram  V.  Wilson,  Arthur 
Hughes,  Charles  Hickox  and  Oliver  H.  Ferry  were  named  special 
commissioners  to  make  the  subscription  if  approved  by  the  legal 
voters.'"  To  determine  the  wishes  of  the  voters  in  the  matter,  the 
Mayor  was  empowered  to  order  by  proclamation,  a  special  election. 
The  election  was  held,  and  favored  the  purchase  of  the  stock'^  which 
was  made  by  the  commissioners. 

To  pay  for  the  stock  the  commissioners  issued  $100,000  of  city 
bonds  bearing  interest  at  seven  per  cent.  The  commissioners  agreed 
to  take  the  stock  at  par  and  to  the  redemption  of  the  bonds  at  their 
face  value  provided  they  were  not  sold  below  93  per  cent.  On  its 
part  the  railroad  agreed  to  idemnify  the  city  for  the  interest  on  the 
bonds  until  the  dividends  from  the  stock  should  reach  seven  per  cent. 
The  bonds  when  sold  realized  98  per  cent  of  their  face  value,  and  the 
city  was  required  to  pay  but  $2,000  to  bring  them  to  par.  This  was 
raised  by  a  tax  levy  on  the  first  four  wards  of  the  city." 

The  financial  management  of  the  road  was  admirable  from  the 
start.  The  men  who  controlled  it  were  able  and  efficient  in  all  respects. 
When  the  road  was  completed  it  started  immediately  upon  an  era 
of  prosperity.  Its  stock  was  popular  and  rose  rapidly  in  the  market. 
In  August,  1852,  the  directors  declared  a  dividend  of  twenty-five  per 
cent  in  new  stock.  Between  that  date  and  June  1,  1854,  two  other 
dividends,  one  of  twenty  and  the  other  of  thirty  per  cent  were  made. 
The  first  was  declared  in  March,  1852;  and  the  second  in  May,  1854. 
Both  were  paid  in  new  stock.  In  this  time,  too,  the  whole  stock,  not- 
withstanding the  increase,  maintained  a  market  value  of  125. 

"  Laws  of  Ohio,  Vol.  49,  pp.  502-505. 
'"  Section  9  of  Act. 
81  Daily  Herald. 
32  See  p.  5. 


12  History  of  the  Cleveland  Sinking  Fund  of  1862 

In  May,  1854,  the  commissioners  sold  $100,000  of  the  stock  they 
held  in  this  road  to  the  Cleveland,  Zanesville  and  Cincinnati  Railroad. 
By  the  terms  of  the  sale,  the  city  was  to  receive  $125,000,  and  to 
retain  the  right  to  all  dividends  and  profits  on  the  stock,  and  to  all 
new  stock  that  the  Cleveland,  Painesville  and  Ashtabula  Railroad 
issued  between  May,  1852,  and  May,  1859,  the  date  the  bonds  would 
mature.  After  the  stock  was  transferred  to  the  Cleveland,  Zanesville 
and  Cincinnati  Railroad,  it  was  hypothecated  by  that  company  for  a 
loan.  Later,  the  railroad  assigned  the  stock  to  the  City  of  Cleve- 
land; but  the  parties  holding  it  failed  to  hand  it  over,  and  suit  was 
brought  to  recover  it.  The  litigation  continued  for  years,  and  was 
not  ended  when  the  commissioners  in  May,  1862,  turned  over  all 
assets  to  the  Sinking  Fund. 

The  results  of  this  investment  were  most  gratifying.  After  the 
commissioners  had  paid  the  city  bonds,  there  remained  a  surplus  of 
$232,136.19  to  transfer  to  the  Sinking  Fund  Commissioners.  Of  this 
amount  $178,520  was  in  stock  of  the  railroad,  whose  market  value 
was  much  in  excess  of  this  amount.  The  other  assets,  $53,616.19, 
included  a  claim  of  $33,415.41  on  a  depository  in  New  York  that  had 
become  insolvent. 

TABLE  III 

Showing  Result  of  Investment  of  the  City  of  Cleveland  in  the  Cleve- 
land, Painesville  and  Ashtabula  Railroad  Company. 
Expense : 

Bonds  issued    $200,000.00 

Discount  paid  on  the  Bonds 2,000.00 

Total  expense   $202,000.00 

Receipts: 

City  Bonds  paid $200,000.00 

City  stock  in  possession  at  par 178,520.00 

Other  assets,  excluding  the  $33,415.41  noted  above  as  worth- 
less         20,200.78 

$398,720.78 

"This  stock  was  at  that  time  largely  above  par,  and  probably 
worth  in  all  $220,000,  making  a  total  in  receipts  of  $398,720.78."  De- 
duct from  this  the  $202,000  of  expense  account  and  it  appears  that 
the  city  realized  in  direct  profit,  in  eleven  years,  in  its  stock  in  the 
Cleveland,  Painesville  and  Ashtabula  Railroad,  the  sum  of  $196,720.78. 


III. 

THE  ORGANIZATION  OF  THE  BOARD  OF  COMMISSIONERS 

The  commissioners  named  in  the  Act  creating  the  Sinking  Fund 
were   from  among  Cleveland's  most   distinguished   citizens.'*     They 


'3  Mr.  Henry  B.  Payne  was  born  in  Hamilton,  New  York,  Novem- 
ber 30,  1810.  He  graduated  from  Hamilton  College  in  1832,  and  immedi- 
ately took  up  the  study  of  law.  In  1833,  he  removed  to  Cleveland  and 
entered  upon  his  profession  which  he  practiced  with  great  success  for 
twelve  years,  when  ill  health  and  increasing  business  cares  compelled  his 
retirement.  When  the  government  of  Cleveland  was  effected  under  the 
municipal  charter  in  1836,  he  was  appointed  the  first  city  attorney.  He  was 
a  leading  spirit  in  the  early  railroad  enterprises  of  the  State,  and  with 
Richard  Hilliard,  John  W.  Allen  and  John  W.  Woolsey,  inaugurated  the 
measures  that  resulted  in  the  construction  of  the  Cleveland,  Columbus  and 
Cincinnati  Railroad.  In  1851,  he  became  President  of  the  road  and  served 
until  1854.  The  next  year  he  was  made  a  director  in  the  Cleveland,  Paines- 
ville  and  Ashtabula  Railroad.  He  had,  too,  prior  to  his  appointment  as 
one  of  the  Sinking  Fund  Commissioners,  served  his  city  in  1855,  as  a 
member  of  the  first  board  of  Water  Works  Commissioners. — History  of 
Cleveland  (Biographical).  By  James  Harrison  Kennedy.  (Cleveland:  The 
Imperial  Press,  1897),  pp.  60-67. 

Mr.  Franklin  T.  Backus  was  born  May  6,  1813,  at  Lee,  Massachusetts, 
He  graduated  from  Yale  College  in  1834,  and  removed  to  Cleveland  two 
years  later  and  began  the  study  of  law.  He  was  called  to  the  bar  in  1839, 
and  in  1841  was  elected  prosecuting  attorney  of  Cuyahoga  County.  As  a 
Whig,  he  was  sent  to  the  Ohio  House  of  Representatives  in  1846;  and  two 
years  later  was  elected  to  the  State  Senate.  In  1861,  Governor  Dennison 
appointed  him  a  member  of  the  Peace  Conference  which  met  in  Wash- 
ington, February  4,  of  that  year, — Article  on  "Franklin  T.  Backus,"  by 
Hon.  Richard  C.  Parsons.     Magazine  of  Western  History,  Vol.  VIII,  p.  8. 

Mr.  William  Case  was  born  in  Cleveland,  August  10,  1818.  He  served 
in  the  city  council  from  1846  to  1850,  when  he  became  Mayor.  In  1852, 
he  was  given  by  acclamation  the  Whig  nomination  for  Congress  in  the 
Nineteenth  District.  His  opponent,  the  Hon.  Edward  Wade,  had  the  sup- 
port of  both  the  Democratic  and  Free  Soil  parties,  and  Mr.  Case  was 
defeated  by  a  small  plurality.  In  1853  he  was  made  President  of  the 
Cleveland,  Painesville  and  Ashtabula  Railroad.  He  served  in  this  office 
four  and  a  half  years. — Cleveland  Past  and  Present.  Maurice  Joblin,  Pub- 
lisher.    (Cleveland,  1869),  pp.  298-300. 

Moses  Kelly  was  born  in  Livingstone  County,  New  York,  January  21, 
1809.  He  graduated  from  Harvard  College  in  1833,  and  began  the  study 
of  law  at  Rochester,  New  York.  In  1836,  he  came  to  Cleveland  and  became 
a  member  of  the  law  firm  of  Bolton  and  Kelly.  He  was  elected  to  the 
State  Senate  in  1844;  and  in  1849  was  appointed  by  the  General  Assembly 
one  of  the  commissioners  to  subscribe  for  the  City  of  Cleveland  to  the 
capital  stock  of  the  Cleveland  and  Pittsburgh  Railroad  Company.  To 
represent  this  stock,  he  was  made  a  director  of  the  company — Ibid,  pp.  201- 
203. 

Mr.  William  Bingham  was  born  in  Andover,  Connecticut,  March  9.  1816. 
He  came  to  Cleveland  in  1836,  and  secured  a  position  in  the  hardware  store 
of  George  Worthington.  Two  years  later  he  had  acquired  an  interest  in 
the  store.  In  1841,  he  purchased  the  hardware  store  of  Clark  &  Murphy 
and  established  the  house  of  William  Bingham  and  Company,  the  upbuild- 
ing of  which  was  the  principal  work  of  his  life.  He  was  a  member  of  the 
city  council  in  1846.     At  this  time  George  Hoadley  was  Mayor;  and  associ- 


14  History  of  the  Cleveland  Sinking  Fund  of  1862 

were  able,  of  the  highest  probity,  and  ever  interested  in  all  that  made 
for  the  advancement  of  Cleveland.  It  is  in  the  high  character,  ability 
and  business  prudence  of  these  men,  and  their  successors,  that  we 
find  the  chief  reason  for  the  successful  administration  of  the  fund  and 
the  wise  and  beneficent  uses  to  which  it  constantly  has  been  put.  On 
April  15,  seventeen  days  after  the  passage  of  the  act  creating  the 
fund,  the  Commissioners  met  at  the  office  of  Leonard  Case  for  organi- 
zation. Mr.  Henry  B.  Payne  was  unanimously  appointed  President, 
and  Mr.  William  Bingham,  Secretary  pro  tern.  Three  members  of 
the  Commission — Messrs.  Payne,  Backus  and  Kelley — were  appointed 
a  committee  to  draft  by-laws,  and  to  secure  from  the  city  council  an 
ordinance  creating  a  Sinking  Fund  in  conformity  with  the  act  passed 
by  the  General  Assembly,  March  28.'* 

Four  days  later,  April  19,  a  vacancy  was  created  in  the  Board 
by  the  death  of  Mr.  William  Case.  On  May  3  the  Board  met  and, 
subject  to  the  approval  of  City  Council,  appointed  Mr.  Charles  Hickox 
to  fill  the  vacancy.'*  At  this  meeting,  too,  Mr.  D.  H.  Beardsley  was 
appointed  secretary  to  the  Board ;  and  the  Merchants'  Bank  of  Cleve- 
land was  designated  as  the  place  of  deposit  "for  all  moneys  belonging 
to  the  Sinking  Fund."  It  was  further  agreed  that  all  bonds,  certificates 
and  other  assets  of  the  fund  should  be  placed  in  this  bank  for  safe 
keeping. 

Early  in  May  the  special  commissioners  authorized  by  the  Gen- 
eral Assembly  to  subscribe  to  the  capital  stock  of  certain  railroads  for 
the  City  of  Cleveland  turned  over  to  the  Board  the  following  assets  :^^ 

I.  From  the  Commissioners  of  the  Cleveland,  Columbus  and 
Cincinnati  Railroad  Company: 

An  obligation  of  the  City  of  Cleveland,  dated  April  27,  1861,  pay- 
able one  year  from  date,  with  interest  at  6  per  cent $  26,277.29 


ated  in  the  council  with  Mr.  Bingham  were  such  men  as  William  Case, 
Samuel  Williamson,  L.  M.  Hubby  and  J.  A.  Harris.  It  was  in  this  council 
that  the  first  steps  were  taken  for  the  establishment  of  a  system  of  Water 
Works;  and  the  first  resolution  calling  for  an  examination  of  the  question 
was  introduced  into  the  council  by  Mr.  Bingham. — Kennedy's  History  of 
Cleveland   (Biographical),  pp.  68-72. 

3*  Journal  of  the  proceedings  of  the  Board  of  Sinking  Fund  Commis- 
sioners created  by  Act  of  the  Legislature  of  the  State  of  Ohio,  passed 
March  28,  1862,  entitled  "An  act  to  authorize  the  City  of  Cleveland  to  fund 
certain  Railroad  Stocks." 

3*  Charles  Hickox  was  a  native  of  Connecticut.  He  was  born  Novem- 
ber 17,  1810.  In  1827  he  went  to  Rochester,  New  York,  to  reside.  He 
determined  upon  a  business  career  for  himself,  and  began  it  with  a  clerk- 
ship in  a  country  store.  Ten  years  later  he  came  to  Cleveland.  For  a 
time  after  his  arrival  he  was  a  clerk  in  a  forwarding  house;  then  in  1838 
he  established  the  commission  house  of  Gillett  &  Hickox. — Kennedy's 
History  of  Cleveland  (Biographical),  pp.  110-113. 

38  Register  of  Assets  of  the  Board  of  Sinking  Fund  Commissioners.  A 
detailed  statement  of  the  assets  received  was  given  by  the  Board  in  their 
first  report  to  the  City  Council.  See  Annual  Report  of  the  City  of  Cleve- 
land, 1863. 

The  receipts  given  by  the  Board  indicate  that  the  assets  were  received 
from  the  commissioners  of  the  C.  C.  &  C.  road  on  May  3;  and  from  the 
commissioners  of  the  other  two  roads  on  May  10. 


History  of  the  Cleveland  Sinking  Fund  of  1862  15 

II.  From  the  Commissioners  of  the  Qeveland,  Painesville  and 
Ashtabula  Railroad  Company. 

Thirteen  hundred  sixty-four  shares  of  the  capital  stock  of  said 

company,   par   value 68,200.00 

George  B.  Ely,  Secretary's  receipt  for  20  shares  of  the  capital 
stock  of  the  C.  P.  &  A.  R.  R.  Co.,  hypothecated  to  Ely  for 
payment  of  $9,000  loaned  to  the  special  commissioners, 
January  13,  1862 10.000.00 

An  assignment  from  the  Cleveland,  Zanesville  &  Cincinnati  Rail- 
road Company  of  a  certificate  for  200  shares  of  the  capital 
stock  of  the  C.  P.  &  A.  R.  R.  Co.,  the  title  to  which  was  in 
litigation  in  District  Court  of  Cuyahoga  County 100,000.00 

Thirty-five  7  per  cent  mortgage  bonds  of  the  C.  P.  &  A.  R.  R. 

Co.,   each  $500 $  17,500.00 

Scrip  for  the  fractional  part  of  a  bond  in  the  C.  P.  &  A.  R.  R.  Co.         320.00 

A  note  signed  by  Hubby,  Hughes  &  Co.,  Hubby  &  Howe,  and 
J.  M.  Hughes,  dated  March  15,1859,  for  $1,658.98,  on  which 
was  a  credit  endorsement  of  $300 1,358.98 

Two  claims  against  Clark  and  Williamson,  New  York  (sup- 
posed to  be  valueless)  amounting  to 33,415.41 

III.  From  the  Commissioners  of  the  Cleveland  &  Pittsburgh 
Company : 

Two  thousand  shares  of  capital  stock  in  the  C.  &  P.  R.  R.  Co.. ..   100,000.00 
A  certificate   of  indebtedness  by   E.  Rockwell,   Secretary  of  the 

C.  &  P.  R.  R.  Co.,  dated  November  1,  1859,  for 809.13 

A  bill  of  exchange  on  New  York  (entered  as  cash)  the  amount 
of  which  was  held  liable  for  payment  of  two  city  bonds, 
$1,000  each,  with  coupons  attached 2,154.91 

Total    $361,377.52 

It  has  been  stated  that  at  the  first  meeting  of  the  Board  a  com- 
mittee was  appointed  to  secure  from  the  City  Council  the  enactment 
of  an  ordinance  in  conformity  with  the  State  law  creating  a  Sinking 
Fund.  The  council  passed  such  an  ordinance  at  a  meeting  held  May  6. 
When  the  Board  met  on  May  10,  this  ordinance  was  spread  upon  its 
records  and  made  a  part  of  its  minutes.^^  All  legal  requirements  were 
now  fulfilled ;  the  Board  was  organized ;  and  all  of  the  assets  belonging 
to  it  were  in  its  possession. 

"  "An  ordinance  to  create  a  Sinking  Fund  for  the  payment  of  certain 
indebtedness  of  the  city. 

Sec.  I.  Be  it  ordained  by  the  council  of  the  City  of  Cleveland, — That 
for  the  purpose  of  paying  so  much  of  the  indebtedness  of  said  City  con- 
tracted in  the  erection  of  Water  Works,  a  fund  hereinafter  referred  to  will 
be  sufficient  for,  a  Sinking  Fund  is  hereby  created  to  which  is  hereby  appro- 
priated all  the  Railroad  Stocks,  Shares  and  Bonds,  and  proceeds  thereof, 
and  all  assets  growing  out  of  the  same  now  in  the  hands  of  the  commis- 
sioners of  said  City,  and  now  held  and  owned  by  said  City,  and  the  inter- 
est, dividends  and  proceeds  thereof  hereafter  to  accrue  thereon  or  to  be 
realized  therefrom,  in  pursuance  of  an  act  of  the  Legislature  of  the  State 
of  Ohio  entitled  "An  act  to  authorize  the  City  of  Cleveland  to  fund  certain 
Railroad  Stocks,  March  28,  1862."  Said  fund  to  be  managed,  controlled  and 
applied  in  all  respects  in  accordance  with  the  provisions  of  said  act. 

I.  U.  Masters,  President  of  the  CounciL 

C.  E.  Hill,  City  Clerk. 


IV. 

THE  GROWTH  OF  THE  FUND 
1863-1880 

The  first  annual  report  of  the  commissioners,  January  3,  1863, 
showed  a  reduction  in  the  nominal  assets  from  $361,377.52  to  $332,- 
059.07.^^  This  was  due  to  the  sale  of  the  stock  of  the  Cleveland  and 
Pittsburgh  Railroad  Company.  On  September  30,  the  City  Council 
passed  the  following  resolution :  "That  the  Commissioners  of  the 
Sinking  Fund,  be  and  they  are  hereby  requested,  to  sell  the  Pittsburgh 
Railroad  stock  now  in  their  hands,  belonging  to  the  City  of  Cleveland, 
whenever  in  their  judgment  the  interests  of  the  City  will  be  promoted 
thereby:  Provided  always,  and  it  is  hereby  declared  to  be  the  sense 
of  this  Council  that  said  stock  ought  not  to  be  sold  at  a  lower  rate 
than  25  per  cent  on  the  dollar." 

A  certified  copy  of  this  resolution  was  laid  before  the  Sinking 
Fund  Commissioners  at  their  meeting  held  the  next  day,  October  1. 
The  Commission  by  resolution  authorized  its  President  "to  take  such 
measures  as  in  his  judgment  may  be  advisable,  for  the  sale,  in  the 
City  of  New  York  of  the  stock  of  the  Cleveland  and  Pittsburgh  Rail- 
road Company  held  by  the  Board,  and  amounting  to  $100,000"  accord- 
ing to  the  terms  of  the  resolution  by  the  City  Council.  Mr.  Payne 
immediately  took  steps  for  the  disposal  of  the  stock,  and  at  the  next 
meeting  of  the  Commission  reported  that  it  had  been  sold  at  the  fol- 
lowing rates : 

1900  shares,  $50   each,   $95,000  @  43       per   cent $40,850.00 

100  shares,  $50  each,      5,000  @  38^  per  cent    1,937.50 

$42,787.50 
Commission  J4  of  1  per  cent  on  $100,000 250.00 

$42,537.50 

In  this  sale  there  was  no  real  loss  as  the  stock  brought  about 
twice  as  much  as  its  quotation  in  May  when  the  Sinking  Fund  Com- 
mission took  charge  of  it. 

In  other  respects,  too,  the  first  year  was  most  satisfactory.  On 
July  1,  the  Cleveland,  Painesville  and  Ashtabula  Railroad  Company 
had  voted  an  increase  of  one  million  dollars  to  its  capital  stock  and 
divided  it  pro  rata  according  to  holdings  among  the  stockholders. 
This  gave  the  City  an  increase  of  1,188  shares.  The  Company  also 
voted  a  dividend  of  ten  per  cent  on  the  old  stock  which  was  to  be 
applied  in  payment  of  the  new  stock  issued.  The  City's  share  was 
$17,820.00.  At  the  same  time,  too,  the  Company  declared  a  dividend 
payable  in  3^  per  cent  mortgage  bonds  of  the  Company.     From  this 

'■^'^  Supra,  p.  15. 


History  of  the  Cleveland  Sinking  Fund  of  1862  17 

source  the  City  received  $5,940.00  which  with  sixty  dollars  of  the  bond 
scrip  already  held  by  the  Commission  equalled  "the  price  of  twelve 
bonds  of  $500.00  each,  a  certificate  for  which  was  accordingly 
issued."^* 

From  this  time  the  Fund  increased  rapidly.  In  the  first  ten 
years  following  the  organization  of  the  Commission,  the  total  assets, 
par  value,  rose  to  $1,551,106.41.  The  net  income  for  the  year  ending 
December  31,  1872,  was  $98,770.20.  In  this  period  the  assets  had 
increased  $1,189,728.89,  and  the  annual  earning  power  of  the  Fund 
had  risen  to  almost  one  hundred  thousand  dollars.  The  chief  factor 
in  this  remarkable  increase  was  the  Cleveland,  Painesville  and  Ashta- 
bula Railroad.  The  road  was  prosperous  and  there  were  always  good 
dividends.  In  January,  1863,  the  Commission  received  from  this 
source  $15,681.60,  in  the  following  July,  $29,403.00,  and  in  January, 
1864,  on  its  stock  and  stock  scrip,  $34,214.40.  The  next  four  divi- 
dends, those  of  April  and  July,  1864,  and  January  and  July,  1865, 
were  $11,800  each.^®  In  this  latter  year  the  stock  holdings  of  the  City 
in  this  Company  were  increased  from  $237,600  to  $300,000.  On  these 
holdings  the  Commission  received  between  July,  1865,  and  July,  1867, 
four  semi-annual  dividends,  each  for  $15,000.  In  October  of  1867,  the 
Company  issued  and  distributed  to  its  stockholders  75  per  cent  in 
stock.  This  increased  the  stock  in  the  hands  of  the  Commission  to 
$525,000.  This  increase,  however,  must  not  be  regarded  as  a  division 
of  earnings  of  the  road,  but  rather  as  an  increase  for  the  equaliza- 
tion of  its  capital  under  a  "contract  for  a  lease  and  consolidation  of 
earnings  with  the  Cleveland  and  Toledo  Railroad  Company."  The 
dividends  for  January  and  July,  1868,  were  each  for  $18,375.00,  but 
that  for  January,  1869,  was  at  4^/2  per  cent  and  from  it  the  Commis- 
sion realized  $23,625.00.  The  next  four  dividends  were  each  for  $21,- 
000  and  were  paid  in  August,  1869,  February  and  August,  1870,  and 
February.  1871.  In  April,  1871.  the  Commissioners  sold  twenty-five 
thousand  dollars  of  this  stock  for  $26,602.71,  a  net  gain  on  the  par 
value  of  $1,602.71.  The  holdings  of  the  Commission  in  this  road  were 
now  $500,000.  On  this  stock  the  Commission  received  dividends  of 
$20,000  each  in  August,  1871,  February  and  August,  1872,  and  Janu- 
ary, 1873. 

In  March,  1869,  the  Cleveland,  Painesville  and  Ashtabula  and 
the  Cleveland  and  Toledo  Railroads  were  consolidated  and  called  the 
Lake  Shore  Railway.  Two  months  later  the  Lake  Shore  and  Michi- 
gan Southern  Railroad  was  born  in  the  consolidation  of  the  Lake 
Shore  Railway  and  the  Michigan  Southern  and  Northern  Indiana 
Railroad.*"    In  1873,  in  consideration  of  the  surrender  of  $66,666.71  of 


88  Journal  of  the  proceedings  of  the  Board  of  Sinking  Fund  Commis- 
sioners created  by  Act  of  the  Legislature  of  the  State  of  Ohio  passed 
March  28,  1862,  entitled  "An  Act  to  Authorize  the  City  of  Cleveland  to 
fund  certain   Railroad  Stocks." 

"The  dividend  of  April,  1864,  was  an  extra  one. 

*"  History  of  the  Lake  Shore  and  Michigan  Southern  Railway  by  C. 
P.  Leland.  "The  Station  Agent"  for  February,  1894,  pp.  26-37.  See  also 
"When  Railroads  Were  New,"  by  Charles  Frederick  Carter  (New  York, 
1909),  p.  218. 


18  History  of  the  Cleveland  Sinking  Fund  of  1862 

stock  certificates  of  the  Cleveland,  Painesville  and  Ashtabula  Railroad, 
the  Sinking  Fund  Commission  received  $200,000  of  the  consolidated 
stock.  The  holdings  of  the  Commission  in  the  consolidated  road  were 
now  $700,000  and  in  August  of  this  year  (1873)  it  received  a  divi- 
dend of  4  per  cent,  $28,000.  The  investment  in  this  road  had  given 
most  satisfactory  results.  Between  January  1,  1863,  and  January  1, 
1874,  it  had  paid  to  the  Sinking  Fund  Commission  $397,911  in  divi- 
dends alone ;  and  besides  the  dividends  paid,  there  had  been  as  pre- 
viously stated,  large  pro  rata  divisions  of  stock. 

Table  Showing  Acquisitions  of  Stock  of  the  Cleveland,  Painesville  and 
Ashtabula  Railway  Company  by  the  Sinking  Fund  Commission. 

Amount  received  from  Special  Commissioners  May,  1862 $178,200.00 

By  stock  certificate   converted    into   stock 59,400.00 

By  stock  dividend    59,400.00 

By  purchase   (cost  $5,700) 3,000.00 

Stock  issued  for  equalization  of  stock  values  at  time  of  consolida- 
tion with   Cleveland  and  Toledo   Railroad   Company 225,000.00 

By  surrender  of  $66,666.71  of  stock  certificates  in  1873,  four  years 

after  consolidation  with  the  Michigan  Southern  Railroad  Co.  200,000.00 

Total   received    $725,000.00 

When  the  Sinking  Fund  Commissioners  received  the  assets  from 
the  Special  Commissioners  authorized  to  subscribe  for  the  capital  stock 
of  this  road,  $10,000  was  hypothecated  for  a  loan  of  $9,000  and  $100,- 
000  was  in  litigation.  On  May  2,  1854,  an  agreement  was  made  be- 
tween the  Special  Commissioners  and  the  Cleveland,  Zanesville  and 
Cincinnati  Railroad  Company  by  which  $100,000  of  the  Cleveland, 
Painesville  and  Ashtabula  Railroad  Company  was  to  be  transferred 
to  the  Cleveland,  Zanesville  and  Cincinnati  Railroad  Company  in  con- 
sideration of  two  thousand  five  hundred  shares  (par  value  $125,000) 
of  the  latter  company.  In  the  agreement  it  was  stipulated  that  in 
the  transfer  the  City  of  Cleveland  reserved  the  right  "to  receive  for 
the  use  of  the  City  of  Cleveland  all  dividends  that  shall  be  declared 
on  said  stock  by  the  said  Cleveland,  Painesville  and  Ashtabula  Railroad 
Company,  and  all  profits  to  which  the  holder  of  such  stock  shall  be 
entitled  between  the  date  hereof  and  the  first  day  of  May,  A.  D.  1859, 
and  the  right  to  subscribe  for  all  new  stock,  that  the  holder  of  such 
stock  shall  be  entitled  to  subscribe  for  during  the  term  aforesaid,  and 
like  manner  reserving  the  exclusive  right  to  represent  said  stock  and 
to  vote  thereon  at  all  elections  and  other  meetings  of  said  Cleveland. 
Painesville  and  Ashtabula  Railroad  Company  during  the  like  period.""^ 


*i  Memorandum  of  Agreement  made  May  2,  1854,  by  and  between 
Melancthon  Barnett,  Hiram  V.  Willson,  Arthur  Hughes,  Charles  Hickox 
and  Oliver  H.  Perry,  Commissioners  appointed  by  an  act  of  the  General 
Assembly  of  the  State  of  Ohio,  passed  February  13,  1851,  entitled  "An 
act  to  authorize  the  City  of  Cleveland  to  subscribe  to  the  capital  stock 
of  the  Qeveland,  Painesville  and  Ashtabula  Railroad  Company  of  the 
first  part,  and  the  Cleveland.  Zanesville  and  Cincinnati  Railroad  Company 
of  the  second  part."  The  agreement  was  signed  by  all  the  Commissioners 
and  for  the  railroad  by  Simon  Perkins,  its  President. — Ohio  Supreme  Court 
Reports,  Vol.  16,  pp.  240-242. 


History  of  the  Cleveland  Sinking  Fund  of  1862 19 

On  its  part  the  railroad  company  reserved  to  itself  the  right  "to  receive 
for  its  own  benefit  all  dividends  that  shall  be  declared"  on  the  stock 
of  the  Cleveland,  Zanesville  and  Cincinnati  Railroad  and  "all  profits 
to  which  the  holder  of  the  same  shall  be  entitled  between  the  date 
hereof  and  the  first  day  of  May,  A.  D.  1859,  and  the  right  to  subscribe 
for  all  new  stock  that  the  holder  of  such  stock  shall  be  entitled  to 
subscribe  for  during  the  term  aforesaid,  and  in  like  manner  reserving 
the  exclusive  right  to  represent  said  stock,  and  to  vote  thereon  at  all 
elections  and  other  meetings  of  said  Cleveland,  Zanesville  and  Cin- 
cinnati Railroad  Company."*^  The  railroad  company  guaranteed  that 
its  stock  given  to  the  Commissioners  in  exchange  for  that  of  the 
Cleveland,  Painesville  and  Ashtabula  Railroad  Company  should  "be 
worth  in  the  market"  on  May  1,  1859,  and  "for  thirty  days  there- 
after, the  full  sum  of  one  hundred  and  twenty-five  thousand  dollars." 
In  case  it  was  not  worth  this  sum  within  the  time  specified,  the  com- 
pany agreed  to  make  up  to  the  Commissioners  or  their  successors,  the 
amount  that  the  value  of  said  stock  should  lack  to  bring  it  to  par; 
and  to  secure  the  fulfillment  of  this  stipulation,  the  railroad  further 
agreed  that  it  would  "execute  and  deliver"  to  the  Commissioners  "in- 
come bonds  to  the  amount  of  one  hundred  and  fifty  thousand  dollars, 
which  bonds  by  the  terms  thereof  shall  be  convertible  at  the  pleasure 
of  the  holder  thereof,  at  any  time  after  the  first  day  of  May,  A.  D, 
1859,  into  the  stock  of  said  Company,  payable  on  the  said  first  day  of 
May,  A.  D.  1859,  to  bear  interest  at  the  rate  of  seven  per  cent  per 
annum  after  maturity,  if  not  then  discharged,  and  to  be  held  by  the 
said  party  of  the  first  part  as  collateral  security"  for  the  fulfillment 
of  the  agreement.*^  The  agreement  further  provided  that  the  Com-* 
missioners  might  sell  these  bonds,  or  as  many  of  them  as  might  be 
necessary,  in  the  stock  market  of  New  York  to  realize  the  diflference 
between  the  market  and  par  value  of  the  stock  in  case  the  stock  was 
below  par. 

On  May  15  (1854),  the  Commissioners  delivered  the  certificates 
of  stock  to  Simon  Perkins,  John  W.  McMillen  and  Horace  Miller,  the 
committee  appointed  by  the  railroad  company  to  negotiate  for  the 
same.  On  the  transfer  of  the  certificates  it  was  understood  that  they 
"should  be  used  by  the  company  for  no  other  purpose  than  to  raise 
the  means  of  constructing  that  portion  of  the  company's  road  which 
lies  between  Millersburg  and  Zanesville,  and  that  they  should  not  be 
used  at  all  unless  the  subscriptions  so  promised  along  the  line  of  the 
road  to  the  amount  of  $400,000  should  first  have  been  secured;  and 
that  for  the  fulfillment  of  which  condition  Perkins  and  McMillen  gave 
to  the  Commissioners  their  solemn  assurance."  At  this  time  Mc- 
Millen was  the  treasurer  and  financial  agent  of  the  railroad.  He  con- 
tinued in  this  capacity  to  January  1,  1855.  As  financial  agent  he  was 
authorized  to  "negotiate  the  ordinary  securities  belonging  to  the  com- 
pany, and  raise  funds  for  its  use,"  but  he  had  "no  authority  from  the 
board  of  directors  to  dispose  of  the  two  thousand  shares  of  stock  for 
any  purpose  whatsoever."    McMillen,  who  was  President  of  the  Bank 

« Ibid. 
"  Ibid. 


20  History  of  the  Cleveland  Sinking  Fund  of  1862 

of  Akron,  as  well  as  financial  agent  of  the  railroad  company,  had  been 
advancing  for  some  time  the  money  of  the  bank  to  the  use  of  the 
railroad  company.  By  October  16,  1854,  the  amount  so  advanced  was 
about  one  hundred  and  five  thousand  dollars.  On  that  day  he  com- 
municated this  fact  to  the  board  of  directors,  giving  the  amount  in 
gross  "without  any  details,  items  or  dates,"  The  board  of  directors, 
on  this  same  date,  "sold,  assigned,  transferred,  set  over  and  pledged" 
to  McMillen  the  two  thousand  shares  of  stock  of  the  Cleveland, 
Painesville  and  Ashtabula  Railroad  Company  to  protect  him  for  the 
advances  he  had  made.  On  the  next  day  McMillen  assigned  this 
stock  to  the  Bank  of  Akron,  Eleven  days  later  the  directors  of  the 
railroad  rescinded  all  of  the  resolutions  it  had  adopted  October  16. 
On  November  23,  1854,  the  Bank  of  Akron  now  holding  the  certifi- 
cates of  stock  became  insolvent  by  its  failure  "to  redeem  its  circu- 
lating notes  in  the  manner  prescribed  by  the  charter."  As  the  bank 
was  a  branch  of  the  State  Bank  of  Ohio,  all  its  "Property,  securities, 
claims  and  eff^ects  of  every  description,  including  the  claim  against 
McMillen,  with  the  stock  as  security  for  payment"  passed  to  and 
became  vested  in  the  State  Bank  of  Ohio.  Later,  May  2,  1859,  the 
Cleveland,  Zanesville  and  Cincinnati  Railroad  re-transferred  the  stock 
to  the  Special  Commissioners  from  whom  they  had  received  it. 

The  stock,  however,  was  not  delivered,  and  suit  was  brought  in 
the  District  Court  against  the  State  Bank  of  Ohio,  Christopher  Wol- 
cott,  as  receiver  of  the  Bank  of  Akron,  John  W.  McMillen,  the  Cleve- 
land, Zanesville  and  Cincinnati  Railroad  Company,  and  the  Cleveland, 
Painesville  and  Ashtabula  Railroad  Company  "to  perpetually  enjoin 
all  the  defendants,  except  the  latter  company,  from  transferring  or  in 
any  way  disposing"  of  the  certificates.  From  the  District  Court  the 
case  went  to  the  Ohio  Supreme  Court.  It  was  not  finally  disposed 
of  until  more  than  two  years  after  the  organization  of  the  Sinking 
Fund  Commission.  At  the  December  term  of  the  Supreme  Court, 
1865,  a  decision  was  rendered.  This  was  given  by  Chief  Justice 
Jacob  Brinkerhoflf  and  was  concurred  in  by  Associate  Justices  Josiah 
Scott,  Luther  Day,  William  White  and  John  Welch.  Judge  Brinker- 
hoff  decided  in  favor  of  the  plaintiff,  the  City  of  Cleveland,  upon  two 
grounds:  (1)  That  the  Commissioners  of  the  City  "had  no  power 
to  make  the  contract  of  exchange  which  they  assumed  to  make," 
and  (2)  That  the  "so-called  contract  for  an  exchange  of  stocks,  was 
obtained  from  the  Commissioners  of  the  City  of  Cleveland  by  false 
and  fraudulent  representation  made  to  them,  in  the  course  of  the 
negotiation,  by  one  McMillen,  acting  in  behalf  of  the  Cleveland, 
Zanesville  and  Cincinnati  Railroad  Company."** 

On  May  4,  1869,  Mr.  D.  H.  Beardsley,  who  had  been  Secre- 
tary to  the  Commission  since  May  3,  1862,  resigned.  On  the  same 
date  as  his  resignation  his  successor,  Mr.  C.  H.  Hawkins,  was  ap- 
pointed.    One  year  later.  May  14,  1870,  Franklin  T.  Backus  died.    At 


4*  The  City  of  Cleveland  vs.  The  State  Bank  of  Ohio  et  al.— Ohio  Su- 
preme Court  Reports,  Vol.  16,  pp.  236-269. 


History  of  the  Cleveland  Sinking  Fund  of  1862 21 

the  meeting  of  the  Commission,  June  28,  Leonard  Case"  was  elected 
Commissioner  as  his  successor.  Three  months  later  another  vacancy 
occurred  in  the  Commission.  On  August  15  Moses  Kelley  died.  His 
successor  was  not  chosen  until  the  beginning  of  the  next  year.  On 
January  2,  1871,  J.  H.  Wade  was  appointed." 

The  years  that  immediately  followed  the  war  were  marked  by 
prosperity  throughout  the  Nortii  and  West.  This  made  large  divi- 
dends and  high  rates  of  interest  possible  and  helps  to  explain  the 
rapid  growth  of  the  Sinking  Fund  until  at  the  end  of  1872  it  amounted 
to  more  than  a  million  and  a  half  dollars.  In  September,  1873,  oc- 
curred one  of  the  most  disastrous  financial  crises  in  our  history.  The 
alarm  was  given  by  the  failure  of  the  banking  house  of  Jay  Cooke 
and  Company  of  Philadelphia.  Other  failures  followed  rapidly  and 
soon  the  demoralizing  effects  of  the  panic  were  felt  in  all  parts  of 
the  country.  Many  people  believed  it  to  be  merely  a  Wall  Street 
affair  and  looked  for  a  quick  return  to  the  former  good  times;  but 
the  circulation  of  paper  money  which  constantly  fluctuated  in  volume 
and  value  postponed  the  good  times;  weeks  and  months,  and  even 
years  passed  without  their  return.  The  maximum  number  of  bank- 
ruptcies occurred  in  1878.*'  The  production  of  pig  iron  declined 
from  2,560,000  tons  in  1873  to  1,868,000  in  1876;  our  foreign  com- 
merce totalled  $28  per  capita  in  1873,  and  fell  to  $21.93  in  1876; 
the  mileage  of  new  railroads  constructed  fell  from  7,439  in  1872  to 
1,606  in  1875;"  and  the  tons  of  freight  carried  by  railroads  in  1874 
was  2,414,605  less  than  in  1873." 

The   panic    affected   the   Lake   Shore   and    Michigan    Southern 

*5  Leonard  Case  was  born  in  Cleveland,  June  26,  1820.  He  died  Janu- 
ary 6,  1880.  In  1842  he  graduated  from  Yale  College  and  during  the  next 
two  years  he  gave  his  attention  to  the  study  of  law  in  the  Cincinnati  Law 
School.  He  was  admitted  to  the  bar  and  opened  a  law  office  in  Cleve- 
land, but  probably  never  endeavored  to  establish  a  general  practice.  His 
purpose  in  his  law  studies  was  probably  "to  fit  himself  to  be  useful  to  his 
father  and  to  the  estate  which  must  at  all  times  demand  his  attention." 
He  occupied  a  high  place  in  the  business  life  of  Cleveland,  and  was  ever 
interested  in  the  future  development  of  the  intellectual  life  of  the  City  as 
his  gifts  to  Case  Library  and  his  founding  of  The  Case  School  of  Applied 
Science  attest. — Biographical  Cyclopaedia  and  Portrait  Gallery  of  the  State 
of  Ohio  (Cincinnati,  1879),  p.  457;  also,  Cleave's  Biographical  Dictionary 
of  the  State  of  Ohio  (Philadelphia,  1875)  pp.  37-38. 

"J.  H.  Wade  was  born  in  Seneca  County,  New  York,  August  11,  1811. 
He  took  a  leading  part  in  the  development  of  telegraphy.  He  was  at 
Baltimore  when  Morse,  in  1844,  sent  his  first  message  over  the  first  tele- 
graph line.  Three  years  later,  he  constructed  a  line  between  Detroit  and 
Jackson,  Michigan,  and  the  next  year  (1848)  came  to  Ohio.  He  con- 
structed the  "Wade  Lines"  from  Cleveland  to  Cincinnati  and  to  St.  Louis. 
These  soon  became  a  part  of  the  "House  Consolidation."  When  the 
Western  Union  was  organized,  he  became  the  first  general  manager,  and 
later  he  became  president.  He  was  also  identified  with  the  banking  and 
railroad  interests  of  Cleveland. — Biographical  Cyclopaedia  and  Portrait 
Gallery  of  the  State  of  Ohio,  pp.  444-445;  also,  Cleave's  Biographical  Dic- 
tionary of  the  State  of  Ohio,  pp.  27-29. 

*^  In   1878  there  were  10,478  bankruptcies. 

<»  Tenth    Census  of  the  United   States   (1880),  Transportation,  p.  290. 

"  "Financial  Crises  and  Periods  of  Industrial  and  Commercial  Depres- 
sion," by  Theodore  E.  Burton  (New  York,  1902.)     Appendix  B,  p.  343. 


22  History  of  the  Cleveland  Sinking  Fund  of  1862 

most  seriously.  The  first  years  following  it  were  years  of  debt  pay- 
ing under  the  wise  and  conservative  management  of  Commodore  Van- 
derbilt.  The  dividends  that  were  paid  were  small.  In  1874  there 
was  none,  and  between  that  date  and  1880  the  highest  was  one  at  3j4 
per  cent  paid  in  February  of  the  next  year.  In  1876  there  were  two, 
one  paid  in  January  and  the  other  in  August,  each  at  two  per  cent; 
in  1877  there  was  one  at  1%  per  cent;  in  1878  there  were  two,  one 
at  two  per  cent,  paid  in  February  and  one  in  August  at  one  per  cent. 
The  next  year  brought  better  results.  The  Commissioners  received 
a  dividend  in  February  (1879)  at  three  per  cent  and  in  the  follow- 
ing August  another  at  two  per  cent.  For  the  six  years  from  Janu- 
ary 1,  1874,  to  January  1,  1880,  the  average  annual  rate  was  but  two 
and  five-sixths  per  cent,  which  yielded  to  the  Sinking  Fund  a  total  of 
$119,000. 

•  In  October,  1873,  the  Commissioners  bought  $10,000  of  stock 
in  the  New  York  Central  and  Hudson  River  Railroad  for  $9,500.  In 
the  next  year  three  other  purchases  of  stock  were  made  in  this 
road.  In  two  of  these  the  stock,  was  bought  below  par,  but  in  the 
third  the  rate  was  a  little  above.  The  first  purchase  was  made  May  12 
and  was  for  $30,000,  for  which  the  Commissioners  paid  $29,550;  the 
second  was  for  $40,000,  July  1,  and  for  this  they  paid  $38,987.50; 
the  third  was  for  $20,000,  October  15,  and  this  cost  $20,225.00.  The 
fund  now  held  $100,000  of  this  stock.  By  January  1,  1878,  this 
amount  had  been  increased  to  $200,000.  February  3,  1875,  the  Com- 
missioners purchased  $40,000  of  the  stock  at  101 J^,  paying  $40,450; 
$10,000  more  was  purchased  the  following  October  for  $10,262.50; 
and  on  June  29,  1877,  the  President  of  the  Commission  was  author- 
ized to  purchase  $50,000  more.  On  June  20,  $40,000  of  this  amount 
was  bought— all  below  par;  $30,000  was  had  at  90>4,  $27,150;  and 
$10,000  at  90H,  $9,037.50.  On  the  sixth  of  the  following  August 
an  additional  $10,000  was  bought  at  93^  and  for  this  the  Commission 
paid  $9,350.  The  road  regularly  paid  quarterly  dividends  of  two 
per  cent.  Between  October  1,  1873,  when  the  first  ten  thousand  dol- 
lars of  stock  was  bought,  and  January  1,  1880,  the  Commissioners 
received  from  this  source  $67,800.  In  1879  the  Commissioners  made 
an  investment  in  another  railroad  when,  on  October  6,  they  purchased 
five  hundred  shares  of  stock,  $50,000  par  value,  in  the  Kalamazoo, 
Allegan  and  Grand  Rapids  Railroad  under  guarantee  of  the  Lake 
Shore  and  Michigan  Southern  of  six  per  cent  dividends,  payable  semi- 
annually. 

On  January  1,  1879,  four  hundred  thousand  dollars  of  Water 
Works  Bonds  fell  due.  To  take  care  of  this  liability,  the  President 
of  the  Commission  was  authorized  by  vote  of  the  Board  to  take  steps 
to  sell  $37,500  of  bonds  of  the  Cleveland,  Painesville  and  Ashtabula 
Railroad  due  July  1,  1880;  $83,500  bonds  of  the  same  road  due 
October  1,  1892;  and  $52,500  bonds  of  the  Lake  Shore  Railway  due 
April  1,  1899.  To  further  prepare  for  the  liquidation  of  these  bonds, 
the  Commissioners  negotiated  a  loan  of  $86,000  from  the  Second 
National  Bank  of  Cleveland  and  gave  a  note  payable  on  or  before 
October  1,  1879,  with  interest  at  six  per  cent.     In  the  resolution  of 


History  of  the  Cleveland  Sinking  Fund  of  1862 


23 


the  Board  providing  for  this  loan  it  was  stipulated  that  both  principal 
and  interest  should  be  paid  out  of  the  income  of  the  Fund  and  that 
$100,000  of  the  bonds  of  the  Lake  Shore  and  Michigan  Southern  of 
the  issue  of  October  1,  1869,  should  be  hypothecated  to  secure  the 
loan.  On  December  31,  $400,000  were  sent  to  New  York  to  liquidate 
the  bonds. 

On  January  1,  1880,  the  total  assets  of  the  Fund  were  $1,928,- 
742.50.  Adding  to  this  amount  the  $400,000  paid  January  1,  1879, 
to  liquidate  Water  Works  bonds,  we  find  that  between  January  1, 
1863,  and  January  1,  1880,  a  period  of  seventeen  years,  that  the  net 
gain  was  $1,996,683.43.  At  this  time  the  investments  consisted  of 
$750,000  (7,500  shares)  in  railroad  stock;  $590,000  in  seven  per  cent 
railroad  bonds;  $100,000  in  seven  per  cent  bonds  of  the  Chicago  and 
Atchinson  Bridge  Company;*"  $340,000  in  seven  per  cent  bonds  of 
Cleveland  City ;  $58,590  in  an  individual  note  with  collateral  security ; 
and  $90,152.50  in  cash.  The  seventeen  years,  despite  the  panic  of 
1873,  and  the  prevailing  hard  times  in  the  years  that  immediately 
followed  were  years  of  marked  success  for  the  Fund,  and  show  con- 
clusively what  may  be  accomplished  by  municipalities  if  their  funds 
are  invested  under  a  wise  and  conservative  management. 

Table  Showing  Growth  of  Fund  From  January  1,  1863  to 
January  1,  1873. 


January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 
January 


1863    $   332,059.07 

1864    422,203.36 

1865    470,858.91 

1866    569,143.59 

1867    597,272.73 

1868    933,923.78 

1869    1,008,838.50 

1870    1,146,100.68 

1871    1,209,860.93 

1872    1,311,550.79 

1873    1,551,106.41 

1874    1.688,793.79 

1875    1,761,543.44 

1876    1,863,736.41 

1877    1,989,751.84 

1878    2,109,357.21 

187960  1,816.690.53 

1880    1,928,742.50 


"  These  were  First  Mortgage  7  per  cent  gold  bonds  and  were  pur- 
chased at  par,  October  30.   1879. 

""On  January  1,  1879.  the  Commissioners  paid  $400,000  to  liquidate 
Water  Works  bonds  that  matured  on  that  date.    Supra,  pp.  22-23. 


THE  FUND  AND  ITS  USE 
1880-1890 

A  vacancy  was  created  in  the  Board  of  Commissioners  by  the 
death  of  Leonard  Case,  January  6,  1880.  This  was  filled  at  the  next 
meeting  of  the  Board,  January  26,  by  the  election  of  Sylvester  T. 
Everett,  subject  to  the  approval  of  the  City  Council.''^  Before  fur- 
ther consideration  of  the  growth  of  the  fund,  and  the  uses  to  which 
it  was  put  in  the  decade  between  1880  and  1890,  I  desire  to  call 
attention  to  the  General  and  Viaduct  Sinking  Funds  which  in  1879 
passed  under  the  care  and  management  of  the  Commissioners  of  the 
Sinking  Fund  of  1862  because  of  the  fidelity  and  sagacity  with  which 
they  had  administered  the  Fund  of  1862. 

Properly  speaking,  the  General  Sinking  Fund  was  not  a  sinking 
fund  at  all  until  management  passed  to  the  Commissioners  of  the 
Sinking  Fund  of  1862.  The  law  authorized  an  annual  tax  of  not 
less  than  one  mill  nor  more  than  three  to  pay  the  maturing  general 
bonds  for  which  no  other  provision  had  been  made.  No  part  of  this 
tax,  however,  had  ever  been  invested  and  managed  as  a  sinking  fund. 
Each  year  a  tax  was  levied  to  meet  the  bonds  that  would  mature 
the  next  succeeding  year;  and  when  the  tax  money  was  received  it 
was  kept  idle  in  the  treasury  until  it  was"^^  needed  to  liquidate  the 
bonds. 

The  Viaduct  Sinking  Fund  was  the  direct  result  of  the  legisla- 
tion that  authorized  the  construction  of  a  viaduct  over  the  Cuyahoga 
River,  making  possible  closer  intercourse  between  the  east  and  west 


^1  Sylvester  T.  Everett  was  born  in  Trumbull  County,  Ohio,  November 
27,  1838,  and  came  to  Cleveland  to  reside  in  1850.  He  was  educated  in 
the  public  schools  of  his  native  county  and  the  City  of  Cleveland.  For  a 
year  after  leaving  school  he  was  employed  by  the  dry  goods  firm  of  S. 
Raymond  and  Company  and  then  went  to  the  banking  house  of  Brockway, 
Wasson,  Everett  and  Company.  In  1858  he  went  to  Philadelphia  to  assist 
his  uncle,  Charles  Everett,  close  his  business.  When  his  services  to  his 
uncle  had  ended  he  became  superintendent  of  the  McClintocville  Petroleum 
Company  and  remained  with  this  Company  until  1868,  when  he  returned 
to  Cleveland  to  take  the  management  of  the  banking  house  of  Everett, 
Weddell  and  Company.  Eight  years  later  he  was  made  vice-president  and 
manager  of  the  Second  National  Bank.  The  following  January  he  was 
made  President  and  continued  in  this  position  until  the  bank  went  into 
liquidation  in  1882.  Then  he  organized  the  National  Bank  of  Commerce 
and  became  the  first  President.  Later  he  organized  the  Union  National 
Bank.  Mr.  Everett  was  also  largely  interested  in  the  Cleveland  Rolling 
Mill  Company  and  the  Little  Consolidated  Street  Railway.  He  "promoted, 
financed  and  built  at  Akron.  Ohio,  the  first  electric  street  railway  in  the 
United  States." — "A  History  of  Cleveland,"  by  Samuel  P.  Orth,  3  volumes. 
(Chicago-Cleveland,  1910.)     Vol.  3,  pp.  607-608. 

52  City  Auditor's  Report  for  1878.  See  Annual  Report  of  City  of 
Cleveland,  1878. 


History  of  the  Cleveland  Sinking  Fund  of  1862  25 

sides  of  the  city.  In  the  '60s  a  high  level  bridge  had  been  advocated 
and  meetings  were  held  to  bring  about  united  action  in  its  favor ;  but 
there  was  much  opposition  and  it  was  not  until  1870  that  there 
was  a  definite  plan  of  procedure.  Stephen  Buhrer  was  now  Mayor. 
In  his  annual  address  of  1870  he  urged  the  construction  of  a  high 
level  bridge."^^  In  his  address  to  the  City  Council  the  next  year,  he 
again  called  attention  to  this  need."**  In  the  next  year  these  sugges- 
tions bore  fruit  and  the  Council  passed  a  resolution  to  consider  and 
report  upon  the  feasibility  of  a  bridge.  The  committee  reported  fa- 
vorably. But  so  much  opposition  developed  against  the  kind  of  a 
bridge  proposed  that  John  Huntington  introduced  in  the  City  Council 
a  resolution  asking  for  the  appointment  of  a  special  committee  to 
consider  the  construction  of  a  bridge  across  the  river  at  Superior 
Street  and  "to  confer  with  the  Cleveland,  Columbus,  Cincinnati  and 
Indianapolis  Railway  Company,  as  to  the  advisability  of  sinking  their 
tracks  below  grade."  The  resolution  was  adopted,  and  Mayor  F.  W. 
Pelton,  City  Engineer  E.  H.  Strong,  John  Huntington  and  H.  W. 
Leutkemeyer  were  appointed  as  the  Committee. 

On  March  19  this  Committee  made  its  report,  giving  two  prac- 
ticable routes.  One  was  from  the  Atwater  Building  on  Superior 
Street  "to  the  intersection  of  Pearl  and  Franklin  Streets."  This 
"would  require  a  continuous  high  bridge  between  the  points  named." 
The  other  route  was  "from  the  intersection  of  Superior  and  Union 
Streets  to  the  intersection  of  Pearl  and  Detroit  Streets."''" 

The  Committee  submitted  figures  giving  cost  of  each  route  and 
urged  the  adoption  of  the  latter  as  being  the  more  practicable.  The 
Committee  also  suggested  to  the  Council  that  it  take  steps  to  obtain 
from  the  legislature  the  necessary  authority  to  meet  the  situation. 
On  April  27  (1872)  the  law  was  passed  that  gave  the  City  authority 
to  build  the  Viaduct.  It  gave  the  City  power  to  issue  $1,000,000  in 
bonds  "to  build  the  Viaduct,  sink  the  railroad  tracks  and  make  such 
changes  as  were  contemplated  in  the  Ohio  Canal."  The  question  of 
the  bond  issue  was  submitted  to  the  voters  and  carried  by  a  majority 
of  5,451." 

Steps  were  immediately  taken  to  acquire  the  right  of  way  on 
the  West  Side,  and  in  a  little  time  the  contract  was  let  for  the 
masonry  on  that  side.  But  there  was  opposition  to  the  enterprise  and 
an  injunction  completely  tied  it  up  until  1873.  Progress  was  slow 
in  the  next  year.  During  the  years  1874  and  1875  many  changes 
were  made  that  greatly  increased  the  cost,  and  before  the  end  of  the 
latter  year,  it  was  evident  to  all  interested  that  the  money  would  be 
exhausted  long  before  the  work  was  completed.  To  provide  for  this 
contingency,  the  Supplemental  Viaduct  Act  was  passed  April  6,  1876, 


^^  Mayor's  Annual  Message  of  1870.  See  Annual  Report  of  City  of 
Cleveland,  1870. 

**  Annual  Report  of  City  of  Cleveland,  1871. 

"""A  History  of  the  City  of  Cleveland;  Its  Settlement,  Rise  and 
Progress,"  1796-1896,  by  James  Harrison  Kennedy.  (Cleveland,  1896.) 
P.  436.    Also  Orth's  "History  of  Cleveland,"  Vol.  1,  p.  67. 

"•  Kennedy,  p.  437. 


26  History  of  the  Cleveland  Sinking  Fund  of  1862 

"enlarging  the  maximum  limit  of  expenditure"  to  $2,700,000.  It  was 
specified,  however,  that  $250,000  of  this  amount  "should  be  reserved 
to  pay  the  cost  of  sinking  the  railroad  tracks."  The  question  of  an 
increased  bond  issue  was  referred  to  the  people  in  a  special  election 
and  decided  affirmatively.  At  the  same  election,  too,  it  was  decided 
that  tolls  should  be  charged  for  the  use  of  the  Viaduct.**^  In  1877, 
Mayor  William  G.  Rose  in  his  address  to  the  City  Council  said: 
"I  recommend  that  you  provide  by  ordinance  for  taking  tolls  upon 
the  Viaduct,  'prescribing  the  rates,  manner  and  conditions,'  as  the 
statute  requires.  I  suggest  that  the  rates  be  easy,  not  oppressive,  and 
that  you  take  action  in  the  matter  as  soon  as  possible,  that  it  may 
be  definitely  settled  before  the  improvement  is  completed.""^  Finally, 
legislation  was  secured  that  nullified  the  toll  decision  at  the  election 
in  1876  and  made  it  a  free  bridge.  It  was  four  and  a  half  years  in 
building  and  cost  $2,170,000.  On  December  27,  1878,  it  was  turned 
over  to  the  City  authorities. 

The  Supplemental  Viaduct  Act  which  was  passed  April  6,  1876, 
besides  increasing  the  maximum  limit  of  expenditure  also  provided 
for  the  creation  of  a  sinking  fund  to  pay  the  principal  of  the  Viaduct 
bonds  at  maturity.  That  part  of  the  act  that  provided  for  the  sink- 
ing fund  was  found  defective.  Two  years  later.  May  13,  1878,  an 
amendatory  act  was  passed  to  cure  the  defects.  This  provided  for 
the  levy  and  collection  of  an  annual  tax  "not  exceeding  two  mills 
upon  the  general  tax  duplicate."  In  compliance  with  this  provision, 
and  with  that  authorizing  the  General  Sinking  Fund,°^  the  City  Coun- 
cil, April  2,  1879,  on  motion  of  A.  K.  Spencer  passed  an  ordinance 
for  the  management  of  the  General  and  Viaduct  Sinking  Funds.  This 
ordinance  placed  the  care  of  these  funds  with  the  Commissioners  of 
the  Sinking  Fund  of  1862. 

At  the  meeting  of  the  Commission,  May  16  (1879)  the  City 
Auditor  was  present  and  stated  that  in  pursuance  of  the  aforemen- 
tioned ordinance,  he  was  prepared  to  pay  to  the  Commission  thirty- 
one  thousand  three  hundred  and  seventy-six  dollars  and  twenty-two 
cents  then  in  the  City  Treasury  to  the  credit  of  the  Viaduct  Sinking 
Fund.  On  motion  of  Commissioner  Bingham,  President  Payne  was 
authorized  to  receipt  for  this  and  any  other  money  that  might  "be 
passed  over  to  the  control  and  management  of  the  Commissioners 
in  pursuance  of  the  provision  of  said  ordinance."®"  On  January  1, 
1880,  the  total  assets  of  the  Viaduct  Sinking  Fund  were  $318,297.24 
and  of  the  General  Sinking  Fund  $20,895.13.«i 

Items  Constituting  the  Viaduct  Sinking  Fund  January  1,  1880. 

500  shares  of  stock,  Kalamazoo,  Allegan  and  Grand  Rapids  Rail- 
road 6%  dividends  guaranteed  by  the  Lake  Shore  and  Michi- 
gan Southern  Railroad  Company $  50,000.00 

"  Ibid,  437. 

»8  Annual  Report  of  the  City  of  Cleveland,  1877,  p.  40. 

C9  Supra,  p.  24. 

80  Journal  of  the  Proceedings  of  Board  of  Sinking  Fund  Commission- 
ers.    Minutes  of  the  meeting,  May  16,  1879. 

*!  The  further  growth  of  these  funds  and  their  uses  are  considered  in 
the  final  chapter  of  this  monograph. 


History  of  the  Cleveland  Sinking  Fund  of  1862  27 

Valley  Railroad  7%  bonds 265,000.00 

Cash  on  deposit 3,297.24 

$318,297.24 

In  the  ten  years  following  January  1,  1880,  the  Commissioners 
sold  all  of  the  railroad  stock  belonging  to  the  Sinking  Fund  of  1862 
except  eighteen  hundred  shares — par  value  $180,000 — in  the  Lake 
Shore  and  Michigan  Southern.  On  January  1,  1880,  they  held  seven 
thousand  five  hundred  shares  in  three  different  roads.  Five  thousand 
were  in  the  Lake  Shore  and  Michigan  Southern,  two  thousand  in 
the  New  York  Central  and  Hudson  River,  and  five  hundred  in  the 
Kalamazoo,  Allegan  and  Grand  Rapids  road.  It  has  already  been 
shown  how  this  stock  was  acquired.®^  The  thirty-two  hundred  shares 
of  the  Lake  Shore  and  Michigan  Southern  that  were  sold  in  this 
period  brought  prices  above  par  except  one  thousand  shares  sold 
October  6,  1886,  for  $92,124.50.  All  told  the  stock  brought  $337,- 
626.60;  $17,626.60  above  par.  The  following  table  gives  the  date  of 
each  sale,  the  number  of  shares  sold  and  the  amount  received: 

Table  Showing  Disposition  of  Thirty-two  Hundred  Shares  of  Stock 
in  the  Lake  Shore  and  Michigan  Southern  Railway. 

October  3,  1880-  500  shares  at  107-3/8-1/8    $  53,625.00 

October  3.  1880-  500  shares  at  108-3/8-1/8    54,125.00 

December  3.  1880—  600  shares  at  102-1/2-1/8    74,025.00 

December  3.  1880-   100  shares  at  123-5/8-1/8   12.350.00 

October  6.  1886—1,000  shares  at  92.1245    92.124.50 

October  1.  188&—  300  shares  at  101-27/40    30,502.50 

January  14,  1889^  200  shares  at  104.373    20.874.60 

$337,626.60 

The  two  thousand  shares  of  stock  in  the  New  York  Central  and 
Hudson  River  road  were  disposed  of  in  two  sales.  On  December 
3,  1883,  one  thousand  shares  were  sold  at  118  less  %  commission 
and  brought  $117,875.00.  The  second  thousand  shares  were  sold 
September  1,  1885,  at  98^  and  brought  $98,875.00.  This  stock  was 
all  acquired  by  purchase  between  1873  and  1877.  Most  of  it  was 
bought  below  par.  The  two  thousand  shares  cost  $194,512.50  and 
realized  when  sold  $216,750.00— a  net  gain  of  $22,237.50.  These 
shares,  too,  during  the  time  they  were  held  by  the  Commission  paid 
regularly  quarterly  dividends  of  two  per  cent  each  except  the  last 
year  the  Commissioners  held  them.  In  the  last  quarter  of  1884  and 
the  first  of  1885  they  paid  but  one  and  a  half  per  cent;  for  the 
second  quarter  of  1885,  the  rate  was  one  per  cent,  and  for  the 
third  quarter  it  was  one-half  per  cent.  Between  January  1,  1880,  and 
September  1,  1885,  the  date  when  the  last  thousand  shares  were  sold, 
the  Commissioners  received  $74,500  in  dividends  from  this  road.  As 
a  dividend  paying  investment  this  road  in  this  period  proved  better 
than  the  Lake  Shore  and  Michigan  Southern.  Between  January  1, 
1880,  and  August  1,  1881,  the  Lake  Shore  and  Michigan  Southern 

«2  Chapter  IV. 


28  History  of  the  Cleveland  Sinking  Fund  of  1862 

paid  semi-annual  dividends  of  four  per  cent  each.  Then  from  August 
1,  1881,  to  August  1,  1884,  it  paid  quarterly  dividends  of  two  per  cent 
each;  but  the  last  two  dividends  in  1884  were  each  for  only  one  and 
a  half  per  cent.  During  the  next  two  years,  1885  and  1886,  the 
road  paid  no  dividends  at  all.  In  1887  and  1888  there  were  semi- 
annual dividends  of  two  per  cent  each.  In  1889  the  average  was 
a  little  better.  The  dividend  for  February  was  at  three  per  cent  and 
that  for  August,  two.  All  told  the  Commissioners  received  $169,700 
in  dividends  from  the  Lake  Shore  and  Michigan  Southern  road  be- 
tween February  1,  1880,  and  January  1,  1890.  The  stock  of  the  Kala- 
mazoo, Allegan  and  Grand  Rapids  road  was  sold  in  two  lots.  On 
October  22,  1881,  three  hundred  and  eighty  shares  were  disposed  of 
at  par  for  $38,000  and  the  remaining  one  hundred  and  twenty  shares 
were  sold  January  1,  1882,  at  101>^,  realizing  $12,180.  The  stock 
was  bought  at  par,  so  the  net  gain  of  the  selling  over  the  purchase 
price  was  but  one  hundred  and  eighty  dollars.  However,  when  the 
stock  was  bought,  the  Lake  Shore  and  Michigan  Southern  guaranteed 
six  per  cent  dividends,  payable  semi-annually.  These  were  paid  regu- 
larly as  agreed,  and  between  April  1,  1880,  and  January  1,  1882,  the 
date  on  which  the  last  of  the  stock  was  sold,  the  Commissioners  re- 
ceived six  thousand  dollars  in  dividends. 

Besides  the  railroad  stock,  $58,590  in  an  individual  note  and 
$90,152.50  in  cash,  the  remainder  of  the  assets  of  the  fund  on  Janu- 
ary 1,  1880,  as  has  been  stated,*'^  consisted  of  $590,000  in  railroad 
bonds,  $300,000  in  Cleveland  City  bonds,  and  $100,000  in  first  mort- 
gage gold  bonds  of  the  Chicago  and  Atchinson  Bridge  Company.  All 
were  good  investments,  paying  seven  per  cent  interest.  The  railroad 
bonds  were  of  five  different  roads.  $245,000  were  of  the  Lake  Shore 
and  Michigan  Southern,  $250,000  of  the  Chicago  and  Northwestern, 
$20,000  of  the  Jamestown  and  Franklin,  $25,000  of  the  Cincinnati 
and  Indiana,  and  $50,000  of  the  Valley  road.  The  first  bonds  pur- 
chased were  those  of  the  Cincinnati  and  Indiana  Railroad.  These 
were  first  mortgage  bonds  guaranteed  by  the  Indianapolis  and  Cin- 
cinnati Railroad.  On  February  25,  1863,  the  Board  of  Commissioners 
authorized  President  Payne  to  buy  $25,000  of  them  at  par.  Thirteen 
thousand  dollars  was  to  be  paid  on  that  date  and  the  balance  as 
soon  as  the  income  of  the  fund  would  permit.**  In  the  next  year 
$45,000  of  bonds  in  the  Jamestown  and  Franklin  road  were  bought. 
On  January  1,  1865,  $5,000  more  were  purchased,  and  on  July  1, 
1865,  $10,(X)0  additional  were  bought,  making  the  total  held  in  this 
company  $60,000.  The  first  of  the  Chicago  and  Northwestern  bonds 
were  purchased  in  1876.  At  that  time  the  Commissioners  bought 
$150,000  of  the  bonds  at  prices  ranging  from  90  to  95^.  The  one 
hundred  and  fifty  thousand  cost  $138,002.50.  In  the  next  year  the 
Commissioners  purchased  another  hundred  thousand.  Fifty  thou- 
sand were  purchased  in  January  at  prices  from  84^  to  93ys  and  for 
these  the  Commissioners  paid  $44,386.25.     The  other  fifty  thousand 


^^  Supra  23. 

8*  Journal  of  the  Proceedings  of  Board  of  Sinking  Fund  Commissioners. 
Minutes  for  meeting  held  February  25,  1863. 


History  of  the  Cleveland  Sinking  Fund  of  1862  29 

were  bought  later  in  the  year  at  rates  from  87^  to  94^.  These 
cost  $45,390.  In  all  the  bonds,  $250,000  par  value,  cost  $227,778.75. 
The  bonds  in  the  Valley  road,  $50,000  par  value,  were  bought  in 
1879  at  75  and  cost  $37,500.  The  bonds  of  the  Jamestown  and  Frank- 
lin road  and  much  the  greater  part  of  those  of  the  Lake  Shore  and 
Michigan  Southern  were  held  by  the  Commission  until  they  ma- 
tured. Of  the  sixty  thousand  Jamestown  and  Franklin  road  bonds, 
forty  thousand  had  matured  by  July  1,  1878.  There  now  remained  in 
the  hands  of  the  Commission,  twenty  thousand  dollars  of  these  bonds ; 
of  these,  ten  thousand  matured  July  1,  1880,  nine  thousand  July  1, 
1881,  and  one  thousand  July  1,  1882.  Of  the  $245,000  of  Lake  Shore 
and  Michigan  Southern  bonds,  one  hundred  and  ninety-three  thousand 
dollars  matured  October  2,  1882.  The  remaining  bonds  of  this  road 
were  sold  by  the  Commission  at  prices  above  par.  Thirty-six  thou- 
sand dollars  of  them  were  sold  October  9,  1884,  for  $42,435 ;  sixteen 
days  later  the  last  of  these  bonds  ($16,000)  were  disposed  of  for 
$18,620.  On  September  6,  1880,  the  bonds  in  the  Cincinnati  and  In- 
diana Railroad — twenty-five  thousand  dollars — were  sold  at  par;  and 
on  June  12,  1883,  the  fifty  thousand  in  the  Valley  road  were  sold  at 
par  to  the  Viaduct  Sinking  Fund.  The  Chicago  and  Northwestern 
bonds  were  all  sold  at  good  rates  above  par. 

Table  Showing  Disposition  of  Chicago  and  Northwestern 
Railroad  Bonds. 

Par  Value  of  Amount 

Date  of  Sale                                                      Bonds  Sold  Received 

October        1,1884 $80,000.00  $99,900.00 

October     25,  1884 25,000.00  31.343.75 

December  13,  1884 12,000.00  15,500.00 

August         7,  1885 33,000.00  42.956.25 

October      15,1885 50,000.00  64,937.50 

October     25,1887 50,000.00    "  63,885.00 

$250,000.00  $318,522.50 

These  bonds  proved  to  be  an  unusually  good  investment.  As 
has  been  stated  they  were  purchased  below  par  and  were  sold  at  con- 
siderably above.  They  were  purchased  for  $227,778.75  and  sold  for 
$318,522.50,  bringing  a  net  gain  of  $90,743.75.  The  Chicago  and 
Atchinson  Bridge  Company  bonds  were  purchased  in  1879."  One 
thousand  dollars  of  these  matured  June  1,  1883,  and  five  thousand 
more  were  redeemed  December  1,  1884.  There  now  remained  $94,000 
of  these  bonds.  On  January  5,  1885,  the  Board  authorized  President 
Payne  to  exchange  them  for  an  equal  amount  of  six  per  cent  bonds 
to  be  issued  by  the  Company.  The  reason  for  the  exchange  of  the 
seven  per  cent  bonds  for  the  proposed  new  six  per  cent  bonds  was 
because  the  former  were  held  subject  to  payment  on  call,  while  the 
latter  were  to  be  made  payable  thirty  years  after  date.  Later  in  the 
year  the  exchange  was  made.  The  disposal  of  the  railroad  stock  and 
bonds  was  followed  by  a  marked  increase  of  Cleveland  City  bonds 

"'^  See  note  49,  page  23. 


30 History  of  the  Cleveland  Sinking  Fund  of  1862 

in  the  assets  of  the  Fund.  The  last  of  the  railroad  bonds  were  sold 
October  25,  1887.  In  the  itemized  statement  of  assets  of  the  Fund 
given  by  the  Commissioners  in  their  report  for  the  year  ending  De- 
cember 31,  1887,  we  find  $637,000  in  six  per  cent  bonds,  $110,000  in 
five  per  cent  bonds  and  $25,000  in  four  per  cent  bonds — all  issued  by 
the  City  of  Cleveland. 

In  this  decade,  January  1,  1880,  to  January  1,  1890,  the  Com- 
missioners of  the  Sinking  Fund  liquidated  $1,720,382.29  of  obliga- 
tions of  the  City  of  Cleveland.  Prior  to  January  1,  1880,  they  had 
paid  $425,000,  making  a  total  of  $2,302,503.96  that  had  been  applied 
by  the  Commissioners  for  the  benefit  of  the  City  down  to  January 
1,  1890.  Of  this  amount,  $925,000  was  the  original  Water  Works 
bonded  indebtedness.  In  1881,  the  Commissioners  completely  wif>ed 
out  the  last  of  this  debt.  The  first  payment  was  made  July  1,  1878, 
when  $22,500  were  used  for  the  redemption  of  bonds.  On  December 
31  of  this  same  year  the  Commissioners  sent  $400,000  to  New  York 
for  the  redemption  of  bonds  due  January  1,  1879.®*  The  next  year 
the  Board  redeemed  $12,500  of  bonds  and  cancelled  an  equal  amount 
in  the  assets  of  the  Fund.  In  1880  they  paid  $175,000,  making  a 
total  of  $625,000  of  Water  Works  bonds  that  had  been  liquidated. 
Three  hundred  thousand  dollars  of  the  original  indebtedness  re- 
mained. The  bonds  for  this  were  among  the  assets  of  the  Sinking 
Fund  and  would  become  due  in  1884.  The  City  Council,  March  14, 
1881,  passed  a  resolution  authorizing  and  requesting  the  Commission- 
ers "to  transfer  to  the  City  Auditor  for  cancellation  the  $300,000  of 
the  Water  Works  seven  per  cent  bonds  falling  due  in  1884."  The 
same  resolution  authorized  the  City  Auditor  "to  receive  and  cancel 
the  same."  Four  days  later.  President  Payne  was  authorized  by  vote 
of  the  Board  of  Commissioners  to  deliver  these  bonds  to  the  City 
Auditor."^ 

The  cancellation  of  these  bonds  liquidated  entirely  the  original 
bonded  indebtedness  of  the  Water  Works.  Before  this  obligation  was 
liquidated,  the  City  had  received  other  substantial  benefits  from  the 
Fund.  In  1880,  the  City  Council  referred  to  the  Commissioners  and 
the  City  Solicitor  a  proposed  ordinance  for  the  appropriation  of  money 
from  the  Fund  "to  pay  the  liabilities  of  the  City  for  the  extension 
and  improvement  of  certain  streets."  This  ordinance  was  considered 
at  the  meeting  of  the  Board  held  July  6,  when  it  was  recommended 
that  the  ordinance  be  passed  with  the  amendment  that  the  money 
should  be  paid  "on  the  requisition  of  the  City  Auditor  as  the  same 
may  be  needed  to  meet  the  liabilities  of  the  City  contracts  for  the 
extensions  and  improvements."®*  The  ordinance  was  passed  July  19, 
and  on  September  1,  in  compliance  with  its  provisions,  upon  requisi- 
tion of  the  City  Auditor,  the  Commissioners  paid  $317,759.95  for  the 
liquidation  of  City  bonds  issued  for  street  extension  and  improve- 
ments.®* 

^8  Supra,  p.  22. 

"^  Journal  of  the  Proceedings  of  the  Board  of  Sinking  Fund  Commis- 
sioners.    Minutes  for  meeting  held  March  18,  1863. 
88  Ibid.     Meeting  held  July  6,  1880. 
"»  Annual  Report  of  the  Sinking  Fund  Commissioners  for  1880. 


History  of  the  Cleveland  Sinking  Fund  of  1862  31 

The  Fund  had  accomplished  its  original  purpose,  the  redemption 
of  the  principal  of  the  Water  Works  bonded  indebtedness,  and  hence- 
forth it  was  used  in  other  directions  for  the  benefit  of  the  City.  Just 
one  year,  September  1,  1881,  after  the  payment  of  the  $317,759.95 
for  street  extension  and  improvement,  the  Commissioners,  upon  requi- 
sition of  the  City  Auditor,  paid  $144,492.87  to  redeem  Cleveland 
City  bonds.^°  Between  that  date  and  January  1,  1890,  they  paid 
obligations  of  the  City  to  the  amount  of  $783,129.47.  Of  this  amount, 
$4,233.09  were  applied  in  payment  of  special  debts  assumed  by  the 
City.  The  greater  portion,  $3,727.08,  was  paid  in  1882,  and  the  bal- 
ance, $504.01,  in  1883.  Much  the  larger  part  of  the  total  was  paid 
upon  requistions  of  the  City  Auditor  to  pay  the  City's  share  of  re- 
paving  streets.  For  this  purpose  a  total  of  $587,606.14  were  applied 
between  1882  and  1890  as  follows : 

1882  $218,132.56 

1883  104,913.71 

1884  73.451.96 

1885  11,779.77 

1886  55.259.03 

1887  57,405.78 

1888  51.681.58 

1889  24,981.75 

$587,606.14 

The  sum  of  $55,477.22  was  supplied  to  the  fire  department. 
On  September  22,  1884,  the  City  Council  passed  an  ordinance  appro- 
priating fifty  thousand  dollars  from  the  Fund  "to  be  placed  to  the 
credit  of  the  Fire  Department  Fund  to  increase  the  efficiency  of  said 
department  by  procuring  a  fire  boat  for  use  in  the  river  district  and 
to  replace  five  of  the  engines  now  in  the  department."^^  At  a  meet- 
ing of  the  Board  of  Commissioners  in  the  following  January  (1885) 
it  was  voted  that  the  President  be  authorized  to  pay  into  the  City 
Treasury,  as  provided  by  the  ordinance,  "a  sufficient  amount  to  meet 
the  several  payments  for  five  fire  engines.""  In  this  year  the  Com- 
missioners paid  $21,477.22  for  fire  department  purposes,  and  in  the 
next  year  (1866)  they  paid  into  the  City  Treasury  $29,000  to  pay 
for  a  fire  boat.  Still  three  years  later  (1889)  they  paid  five  thousand 
dollars  more  to  apply  on  a  fire  boat. 

Besides  the  payment  of  the  special  debts  assumed  by  the  City, 
the  City's  share  for  repaving  streets  and  the  amounts  specified  to  the 
fire  department,  the  Commissioners  in  1883  cancelled  forty  thousand 
dollars  of  House  of  Correction  Bonds  that  had  for  a  time  been  a 
part  of  their  assets,  and  in  1888  paid  $38,777.14  to  apply  on  the 
Seneca  Street  Bridge.  This  was  paid  upon  the  authority  of  the  Board 
given  in  a  resolution  passed  August  6,  providing  that  there  should  be 
paid  "into  the  City  Treasury  from  time  to  time  upon  certificates 
of  the  City  Auditor  in  such  amounts  as  may  be  necessary  to  pay  the 
cost  of  the  construction  of  a  bridge  over  the  river  at  Seneca  Street 

"  Ibid.     Report  for  1881. 

'^  Ordinance  171.     Passed  September  22,  1884. 

'*  Journal  of  Proceedings  of  the  Sinking  Fund  Commissioners. 


32 History  of  the  Cleveland  Sinking  Fund  of  1862 

crossing — providing  that  the  sum  of  such  payments  shall  not  exceed 
$85,000."^'  In  the  next  year  the  Commission  paid  an  additional 
$39,660.29  for  this  bridge.  Besides  money  devoted  to  the  erection 
of  the  Seneca  Street  Bridge,  the  Commissioners,  April  13,  1889, 
voted  an  amount  not  exceeding  $8,000  to  pay  for  the  "removing  the 
old  and  constructing  a  new  bridge  and  approaches  over  the  old  river 
bed  at  Willow  Street."'*  The  exact  amount  paid  for  this  purpose 
was  $7,375.00.  The  ten  years  were  indeed  most  advantageous  to  the 
City.  The  following  table  gives  the  uses,  by  years,  to  which  the  Fund 
was  devoted  from  1878  to  January  1,  1890. 

City  Obligations  Paid  From  the  Fund,  1878-1890. 

1878— To  redeem  Water  Works  Bonds. $422,500.00 

Water  Works  Bonds  cancelled 2,500.00 

$425,000.00 

1879— To  redeem  Water  Works  Bonds $  12,500.00 

Water  Works  Bonds  cancelled 12,500.00 

25.000.00 

1880— To  redeem  Water  Works  Bonds $175,000.00 

To  pay  special  debts  assumed  by  City 317,759.95 

492.759.95 

1881— Water  Works  Bonds  cancelled $300,000.00 

To  pay  special  debts  assumed  by  City 144,492.87 

444.492.87 

1882— To  pay  special  debt  assumed  by  City $    3,729.08 

To  pay  City's  share  of  repaying 218,132.56 

221,861.64 

1883 — To  pay  special  debt  assumed $       504.61 

To  pay  City's  share  of  repaying 104,913.71 

House  of  Correction  Bonds  cancelled 40,000.00 

145.418.32 

1884 — To  pay  City's  share  of  repaying $  73,451.96 

73.451.96 

33,256.99 


1885 — For  Fire  Department  purposes $21,477.22 

To  pay  City's  share  of  repaying 11,779.77 

1886— To  pay  for  fire  boat $  29,000.00 

To  pay  City's  share  of  repaying 55,259.03 

1887— To  pay  City's  share  of  repaying $  57,405.78 


84,259.03 
57,405.78 


1888— To  apply  on  Seneca  Street  Bridge $  38,777.14 

To  pay  City's  share  of  repaying 51,681.58 

90,458.72 

1889— To  apply  on   fire  boat $    5,000.00 

To  apply  on  Seneca  Street  Bridge 39,660.28 

To  apply  on  Willow  Street  Bridge 7,375.00 

To  pay  City's  share  of  repaying 24,981.75 

77,017.03 

The  large  drafts  made  upon  the  Fund  in  these  years  to  pay  the 


^3  Journal   of   the    Proceedings    of    the    Sinking    Fund    Commissioners. 
Meeting  held  August  6,  1888. 

7*  Ibid.    Meeting  April  13,  1889. 


History  of  the  Cleveland  Sinking  Fund  of  1862  33 

obligations  of  the  City  considerably  reduced  the  earning  power  of  the 
Fund.  In  1880,  the  net  income  was  $136,161.71.  Five  years  later  it 
was  less  than  a  third  of  that  amount,  being  only  $41,582.73.  During 
the  remaining  years  of  the  decade  there  was  a  small  increase  over 
that  amount.  In  1889  it  rose  to  $58,785.13.  At  the  end  of  this  year, 
too,  the  total  assets  were  $1,054,607.37. 

Net  Proceeds  by  Years,  1880-1890. 

1880   $   136,161.71 

1881    100,896.36 

1882  90.814.74 

1883  78,513.77 

1884  64.690.28 

1885  41,582.73 

1886  48.023.06 

1887  55,210.73 

1888  59,374.49 

1889  58.785.13 

;  Total  Assets  by  Years,  1880-1890. 

January  1,  1881 $1,596,265.53 

January  1,  1882 1,252,849.02 

;  January  1,  1883 1,121,802.12 

January  1,  1884 1,072.772.57 

January   1,  1885 1,102,187.89 

January   1,  1886 1,134,181.29 

January  1,  1887 1,090,069.82  ' 

January  1,  1888 1,102,049.27 

January  1,  1889 1,071,527.54 

January  1,  1890 1,054.607.37 


VI. 

THE  FUND  AND  ITS  USE 
1890-1900 

On  January  1,  1890,  the  Commissioners  held  one  hundred  and 
eighty  thousand  dollars  of  the  stock  in  the  Lake  Shore  and  Michigan 
Southern  Railroad.  It  has  been  shown  how  this  stock  came  into  the 
hands  of  the  Commissioners  and  the  revenues  the  Fund  received  from 
it  through  dividends  down  to  1890.  The  Commissioners  continued  to 
hold  this  stock  as  a  part  of  the  assets  of  the  Fund  until  1898.  Then, 
February  26,  on  motion  of  Mr.  Andrew  Squire,^"*  it  was  voted  to 
exchange  it  for  three  hundred  and  sixty  thousand  dollars  worth  of 
three  and  a  half  per  cent  bonds  in  the  New  York  Central  and  Hudson 
River  Railroad  Company ;  and  to  sell  "any  and  all"  of  the  ninety- four 
thousand  dollars  of  bonds  issued  by  the  Atchinson  Bridge  Company 
if  the  City  Council  consents."  On  March  14  the  City  Council  voted 
consent;^'  and  on  August  1  of  the  same  year  the  Commissioners  re- 
ceived six  thousand  three  hundred  dollars,  the  semi-annual  interest  on 
the  three  hundred  and  sixty  thousand  dollars  of  bonds. 

During  the  eight  years  of  this  decade  in  which  the  stock  was  a 
part  of  the  assets  of  the  Fund  it  paid  semi-annual  dividends  of  three 
per  cent  except  four  times.  On  August  4,  1890,  it  paid  only  two 
per  cent;  February  3,  1891,  four  per  cent;  August  3,  1891,  two  and 
a  half  per  cent,  and  February  1,  1892,  three  and  one-half  per  cent. 
In  the  eight  years,  the  Commissioners  received  a  total  of  ninety-one 
thousand  eight  hundred  dollars  from  dividends  on  this  stock.  Evi- 
dently the  investment  was  still  a  good  one  despite  the  fact  that  the 
period  was  one  of  great  stress  in  finance. 

When  the  decade  began  there  were  many  signs  of  prosperity. 
Our  foreign  trade  had  never  been  greater;  the  money  market  was 
favorable  to  business ;  the  tonnage  of  railroads  had  increased ;  and 
"the  amount  of  liabilities  involved  in  business  was  less  than  it  had 
been  for  ten  years."^®  But  other  influences  were  at  work  that  soon 
changed  this  into  financial  trouble.  Already  there  were  heavy  gold 
exports  and  the  amounts  increased  as  the  months  went  by.  In  1891 
the  net  loss  of  gold  was  thirty- four  million  dollars ;  the  next  year  this 
arose  to  fifty-nine  million  dollars.^*  Foreigners  did  not  invest  in 
American  securities  so  liberally  as  in  preceding  years.     The  stability 

""^  Mr.  Andrew  Squire  became  a  member  of  the  Commission  September 
19,  1896,  to  succeed  Honorable  Henry  B.  Payne,  deceased.    See  pp.  50-51. 

''^  Journal  of  Proceedings  of  the  Sinking  Fund  Commissioners. 

"  Ibid.     Meeting  of  Commission,  March  31. 

T8  National  Problems.  By  Davis  R.  Dewey,  p.  253  (vol.  24,  The  Ameri- 
can Nation.  Edited  by  Albert  Bushnell  Hart),  See  also  The  Financial 
Review  (1893)  pp.  1  and  2. 

79  Ibid,  p.  252.  Also  Report  of  the  Secretary  of  the  Treasury,  1891,  pp. 
144-147. 


History  of  the  Cleveland  Sinking  Fund  of  1862  35 

of  the  new  great  industrial  companies  was  undermined  by  speculation 
that  brought  violent  fluctuations  in  the  prices  of  securities.  In  1892 
and  the  early  part  of  1893,  "sugar  ranged  from  78  to  134;  cordage, 
from  91  to  147 ;  distilling  and  cattle- feeding,  from  36  to  72 ;  and  lead, 
from  30  to  52."*°  The  money  market  of  Europe,  because  of  "the 
scramble  for  gold,"  was  in  an  abnormal  condition.  In  1892,  Austria- 
Hungary  decided  to  resume  specie  payment  and  "consequently 
searched  the  money  markets  of  the  world  to  provide  a  redemption 
fund  for  gold.  Russia  mysteriously  gathered  gold  for  purposes  not 
then  known,  and  the  Bank  of  France  added  to  her  supply  to  support 
an  increased  note  circulation."  The  Barring  collapse  in  1890  made 
the  English  bankers  more  cautious  and  more  energetic  in  the  matter 
of  strengthening  their  reserves,  and  brought  about  a  decline  of  credit 
in  the  Australian  colonies.  All  this  added  distrust  and  the  effect  was 
not  felt  more  seriously  than  in  the  United  States.  American  bankers 
became  exceedingly  "cautious  in  undertaking  loans  for  railroads.  For 
years  large  railroad  systems,  burdened  with  heavy  interest  charges, 
had  struggled  along  with  varying  fortunes.  Some  had  staved  off  bank- 
ruptcy by  new  borrowings;  others  aided  by  the  transportation  of  the 
large  crop  of  1891  were  delaying  the  day  of  reckoning."*^ 

The  superficial  sign  of  prosperity  was  soon  to  give  way  to  the 
distrust  that  was  felt  all  over  the  country.  The  first  open  break 
came  with  the  bankruptcy  of  the  Philadelphia  and  Reading  Railroad. 
This  was  followed  by  a  stock  panic,  which  brought  higher  money 
rates.  Securities  in  which  there  had  been  speculation  fell  in  value, 
and  the  public  treasury  was  strained  to  a  high  tension  because  of  the 
continued  exportation  of  gold  destroying  the  gold  reserve  of  the  Gov- 
ernment. Bankers  in  New  York  refused  to  re-discount  notes  offered 
by  interior  institutions,  and  in  June  (1893)  these  same  bankers  "is- 
sued clearing  house  certificates  which  were  practically  loans  to  em- 
barrassed banks  upon  acceptable  security,  and  for  a  brief  moment 
relieved  the  money  market."*^  More  than  fifty-five  million  dollars 
of  clearing  house  certificates  were  issued  in  New  York,  Boston  and 
Philadelphia.**  But  the  downward  course  could  not  be  stayed.  In 
June  (1893)  the  Erie  Railroad  failed.  Matters  were  complicated  still 
further  by  the  closing  of  the  mints  in  India  to  private  (free)  coinage. 
This  unsettled  the  value  of  silver  which,  in  less  than  a  week,  in  Lon- 
don, fell  from  thirty-seven  and  a  half  pence  per  ounce  to  thirty  and 
a  half.  In  the  United  States  the  free  and  unlimited  coinage  of  silver 
in  the  ratio  of  16  to  1  of  gold  became  a  political  issue  that  boded  illy 
to  conservative  and  safe  business,  which  alone  made  real  progress 
possible.  The  distrust  continued.  In  the  five  months  between  May 
and  October,  "bank  deposits  were  diminished  by  $378,000,000  and 
loans  about  as  much."**  There  were  bankruptcies  without  number. 
In  1893  six  hundred  and  forty-two  banks  failed,  and  mercantile  es- 
tablishments with  liabilities  that  amounted  to  $347,000,000.     The  in- 

""  Dewey,  p.  255. 

*i  Dewey. 

*2  Dewey. 

"3  This  amount  was  a  third  of  the  total  circulation  of  those  banks. 

**  Dewey. 


36  History  of  the  Cleveland  Sinking  Fund  of  1862 

crease  in  railroad  construction  had  not  been  so  slight  since  1878,  and 
before  the  end  of  1893,  twenty-two  thousand  five  hundred  miles  of 
railroads  were  in  the  hands  of  receivers. 

Under  such  economic  conditions  one  would  hardly  expect  a  rapid 
growth  in  the  assets  of  the  Sinking  Fund.  Despite  the  ugly  economic 
conditions,  however,  growth  was  satisfactory,  and  complimentary  to 
the  wisdom  and  business  prudence  of  the  Commission.  In  1890  the 
total  assets  were  $1,049,536.36;  on  January  1,  1900,  these  had  risen 
to  $1,742,978.25. 

The  following  tables  give  the  net  gain  by  years  and  the  total  assets 
January  1  of  each  year  following 

Net  Gain 

1890    $     59.347.18 

1891  62,003.84 

1892  62.220.76 

1893  61.231.92 

1894  67.679.36 

1895  65.142.75 

1896  68,198.58 

1897  74,014.41 

'  1898    254503.39 

1899    46.150.66 

'  Total  Assets 

January  1,  1891 $1,049,536.36 

January  1,  1892 1.054.714.89 

January  1,  1893 1,116,057.68 

January  1,  1894 1,167,289.60 

January  1,  1895 1,234,968.96 

January  1,  1896 1,300,111.71 

January  1,  1897 1,368,310.29 

January  1,   1898 1.442,324.70 

January  1,  1899 1.6%,828.09 

January  1,  1900 1,742.978.75 

Besides  the  amounts  given  in  the  total  assets,  the  Commissioners 
had  paid  into  the  City  Trea.sury  on  requisition  of  the  City  Auditor  the 
following  amounts : 

1890 — To  pay  City's  share  of  repaying  streets $62,489.48 

1891 — ^To  pay  City's  share  of  repaying  streets 56,824.31 

1892— To  pay  for  lost  bonds^s 2.210.00 

1892 — City's  share  of  repaying  streets 8.667.97 

The  City  obligations  paid  from  the  Fund  between  1878  and  1890 
have  been  given.®"  The  advantages  and  gain  to  the  City  can  best  be 
seen  in  a  recapitulation  of  the  applications  of  the  Fund  down  to  Janu- 
ary 1,  1893. 


^^  These  bonds  Nos.  23  and  89  and  two  coupons  attached  should  have 
been  a  part  of  the  assets  of  the  Special  Commissioner  of  the  Cleyeland  and 
Pittsburg  Railroad  Company,  but  were  lost  and  not  found  until  1892.  At 
the  meeting  April  9,  18S^,  on  resolution  introduced  by  Mr.  William  Bing- 
ham, the  Commissioners  voted  their  payment;  the  bonds  and  coupons 
aggregated  to  the  sum  of  $2,210.00. 

88  Page  32. 


History  of  the  Cleveland  Sinking  Fund  of  1862 37 

Recapitulation: 

Water  bonds  redeemed  and  cancelled $  925,000.00 

House  of  Correction  bonds  cancelled 40,000.00 

City  Debt  assumed  and  paid 468,696.51 

City's  share  of  repaying  streets 725,587.90 

For  fire  department  purposes 55,477.22 

For   bridge    construction 87,742.13 

Total    $2,302,503.76 

Besides  the  amount  applied  as  stated  above  the  Commissioners  on 
January  1,  1893,  had  assets  to  the  amount  of  $1,045,12470;  this 
amount  plus  the  applications  given  above  gives  a  grand  total  of  $3,347,- 
628.46.  When  the  Commissioners  assumed  office  assets  to  the  amount 
of  $361,377.52  were  turned  over  to  them.  In  thirty  years  by  their 
prudence  and  good  management  they  had  made  this  fund  produce  a 
net  gain  of  $2,986,250.94.  Evidently  here  is  a  lesson  in  the  manage- 
ment of  city  finances  not  understood  by  most  American  cities,  and 
one  which  ought  to  be  learned. 

At  a  called  meeting  of  the  Commission,  April  26,  1893,  President 
Payne  stated  that  its  purpose  was  the  appointment  of  three  Park 
Commissioners.  On  April  5,  of  this  same  year  the  General  Assembly 
of  the  State  enacted  a  law,  Section  1  which  reads  as  follows :  "Be  it 
enacted  by  the  General  Assembly  of  the  State  of  Ohio,  That  in  cities 
of  the  second  grade  of  the  first  class  there  shall  be  a  board  of  park 
commissioners  consisting  of  five  members,  who  shall  be  electors  of  the 
city  for  which  they  are  appointed;  two  of  whom  shall  be  the  Mayor 
and  President  of  the  Council  for  the  time  being  and  three  of  whom 
shall  be  appointed  by  the  trustees  of  the  sinking  fund  of  such  city, 
if  there  be  such  trustees;  and  if  there  be  none,  then  by  the  Court  of 
Common  Pleas  of  the  county  in  which  such  city  is  situated.  But  no 
more  than  two  of  said  trustees  so  appointed  shall  be  of  the  same  politi- 
cal party.  One  member  of  said  board  shall  be  appointed  for  the  term 
of  three  years ;  one  member  for  the  term  of  four  years,  and  one  mem- 
ber for  the  term  of  five  years  from  the  date  of  their  appointment ;  and 
at  the  expiration  of  each  of  said  terms  the  appointment  of  their  suc- 
cessors shall  be  for  the  term  of  five  years.  All  the  members  of  said 
board  so  appointed  shall  serve  until  their  successors  are  appointed  and 
qualified,  and  all  vacancies  on  said  board  shall  be  filled  for  the  unex- 
pired term  only." 

In  accordance  with  the  above  section  the  Board  of  Commissioners 
elected  Mr.  Charles  H.  Bulkley  for  the  five  year  term ;  Mr.  Amos 
Townsend  for  the  four  year  term ;  and  Mr,  John  F.  Pankhurst  for  the 
three  year  term.  On  April  13,  1896,  Mr.  Pankhurst  was  elected  his 
own  successor  for  five  years,  from  April  26  of  that  year.  In  March 
of  1895,  Mr.  Townsend  died  at  St.  Augustine,  Florida,  and  on  the  22nd 
of  the  same  month  Mr.  J.  H.  McBride  was  appointed  his  successor 
for  the  unexpired  portion  of  the  four  year  term  for  which  which  Mr. 
Townsend  had  been  elected.  On  April  15,  1897,  Mr.  McBride  was 
elected  his  own  successor  for  five  years  from  April  26  of  that  year. 
On  October  27,  1897,  Mr.  Pankhurst  resigned  his  office  because  of  ill 
health,  and  Mr.  S.  W.  Sessions  was  chosen  three  days  later  to  fill  the 


38  History  of  the  Cleveland  Sinking  Fund  of  1862 

unexpired  term.  Admirably  as  the  Board  of  Commissioners  had  per- 
formed their  services  in  the  management  of  the  fund  and  in  making 
the  appointments  to  the  Park  Board,  there  were  those  who  either  failed 
to  comprehend  their  great  services  to  the  City,  or  for  other  reasons, 
who  objected  to  their  further  continuing  to  exercise  the  functions 
granted  the  Board  by  the  act  of  March  28,  1862,  and  amended  April 
16,  1888,  and  the  act  of  April  5,  1893,  *'  and  Quo  Warranto  proceed- 
ings were  brought  against  the  Board  by  Mr.  Theodore  L.  Strimple, 
Prosecuting  Attorney  for  Cuyahoga  County.  Associated  with  Mr. 
Strimple  were  the  law  firms  of  Lawrence  &  Estep,  Hamilton,  Hamilton 
&  Smith,  and  Lee  &  Tilden.  The  petition  and  precipe  were  filed  and 
summons  issued,  April  23,  1897. 

A  special  meeting  of  the  Board  of  Sinking  Fund  Commissioners 
was  called  and  held  May  4,  1897.  At  this  meeting  the  following  reso- 
lution was  introduced  by  Mr.  Edwards:  "Resolved,  That  this  Com- 
mission request  Honorable  W.  W.  Boynton  and  Squire,  Sanders  & 
Dempsey  to  represent  this  Board  in  the  Quo  Warranto  proceedings 
brought  against  this  Board  by  the  Prosecutor  of  Cuyahoga  County, 
Ohio."  The  petition  alleged  that  "the  Commissioners,  William  Bing- 
ham, Sylvester  T.  Everett,  William  Edwards,  James  Barnett  and  An- 
drew Squire,  are  and  have  been  for  a  long  time  past  unlawfully  hold- 
ing and  exercising  the  following  rights,  privileges  and  franchises, 
within  this  state,  to  wit: 

1.  That  of  being  and  acting  as  the  sinking  fund  commissioners 
of  the  City  of  Cleveland,  which  said  city  is  a  municipal  corporation 
organized  under  the  laws  of  the  State  of  Ohio,  and  is  a  city  of  the 
second  grade  of  the  first  class,  and  as  such  sinking  fund  commissioners 
of  having  the  custody,  control  and  management  of  the  sinking  funds 
of  said  city,  of  the  value  of  more  than  one  million  dollars,  and  of 
doing  and  performing  all  other  acts  and  things  provided  to  be  done 
and  performed  by  the  sinking  fund  commissioners  of  said  city  by  an 
act  entitled  'An  act  to  authorize  the  City  of  Cleveland  to  fund  certain 
railroad  stocks,'  passed  by  the  general  assembly  of  Ohio,  March  28, 
1862,  as  amended  April  16,  1888. 

2.  That  of  acting  as  trustees  of  the  sinking  fund  of  said  city, 
and  as  such  trustees  of  appointing  three  members  of  the  Board  of 
Park  Commissioners  in  said  city,  provided  for  by  section  1  of  an  act 
entitled  'An  act  to  provide  a  board  of  park  commissioners,  and  to 
provide  for  the  acquisition  of  grounds  for  parks,  park  entrances  and 
park  driveways  in  cities  of  the  second  grade  of  the  first  class,'  passed 
by  the  general  assembly  of  Ohio  April  5,  1893. 

And  the  said  relator  further  gives  the  court  to  understand  and  be 
informed  that  the  defendants  are  and  for  a  long  time  past  have  been 
unlawfully  exercising  public  offices  within  this  state  under  the  name 
and  style  of  sinking  fund  commissioners  of  the  city  of  Cleveland,  under 
the  pretended  authority  of  said  act  of  March  28th,  1862,  hereinbefore 


87  This  act  gave  authority  for  the  appointment  of  Park  Commissioners. 
The  Sinking  Fund  Commission  derived  its  authority  to  act  as  such  and 
was  organized  under  the  act  of  March  28,  1862.  , 


History  of  the  Cleveland  Sinking  Fund  of  1862 39 

referred  to,  and  as  such  of  exercising  all  the  powers  conferred  or  at- 
tempted to  be  conferred  upon  the  sinking  fund  commissioners  by  said 
act. 

And  the  relator  further  gives  the  court  to  understand  and  be 
informed  that  the  said  defendants,  under  the  name  of  sinking  fund 
commissioners  of  the  city  of  Cleveland,  are  and  have  been  for  a  long 
time  past  acting  as  a  corporation  within  this  state  without  being  legally 
incorporated. 

And  the  relator  further  says  that  the  said  act  of  the  general  as- 
sembly, entitled  'An  act  to  authorize  the  city  of  Cleveland  to  fund 
certain  railroad  stocks,'  passed  March  28,  1862,  is  in  conflict  with 
section  1,  of  article  13,  of  the  constitution  of  the  state  of  Ohio,  pro- 
viding that  the  general  assembly  shall  pass  no  special  act  conferring 
corporate  powers;  and  with  section  27,  of  article  2,  of  said  constitu- 
tion providing  that  the  election  and  appointment  of  all  officers  and 
the  filling  of  all  vacancies,  not  otherwise  provided  for  by  this  constitu- 
tion or  the  constitution  of  the  United  States,  shall  be  made  in  such 
manner  as  may  be  directed  by  law,  but  no  appointing  power  shall  be 
exercised  by  the  general  assembly,  except  as  prescribed  in  this  con- 
stitution and  in  the  election  of  United  States  senators ;  and  with  section 
6,  of  article  13,  of  the  constitution  of  Ohio,  providing  that  the  gen- 
eral assembly  shall  provide  for  the  organization  of  cities  and  incor- 
porated villages  by  general  laws;  and  with  section  26,  of  article  2, 
of  the  constitution  of  Ohio,  providing  that  all  laws  of  a  general  nature 
shall  have  a  uniform  operation  throughout  the  state,  nor  shall  any 
act,  except  such  as  relates  to  public  schools,  be  passed,  to  take  effect 
upon  the  approval  of  any  other  authority  than  the  general  assembly, 
except  as  otherwise  provided  in  this  constitution;  and  that  said  act 
of  March  28,  1862,  is  wholly  unconstitutional  and  void. 

And  the  relator  further  says  that  the  said  defendants  derive 
their  pretended  authority  to  exercise  the  rights,  privileges  and  fran- 
chises aforesaid  solely  from  said  act  of  March  28,  1862,  the  said 
William  Bingham  being  one  of  the  persons  originally  named  as  a 
commissioner  under  said  act,  and  the  other  defendants  claiming  to 
be  such  commissioners  under  and  by  virtue  of  appointments,  from 
time  to  time,  to  fill  vacancies  caused  by  the  death  of  Henry  B.  Payne, 
Franklin  T.  Backus,  William  Case  and  Moses  Kelley  named  in  said 
act,  such  appointments  having  been  made  in  accordance  with  the  pro- 
visions of  said  act,  and  not  otherwise. 

Wherefore  the  relator  prays  the  advice  and  judgment  of  the 
court  in  the  premises ;  that  the  said  defendants,  and  each  of  them,  be 
compelled  to  answer  to  the  state  of  Ohio  and  show  by  what  warrant 
they  exercise  the  rights,  privileges  and  franchises  and  the  public  offices 
within  this  state  as  aforesaid ;  and  that  they  and  each  of  them  may 
be  ousted  and  altogether  excluded  therefrom." 

The  summons  was  returned  May  3,  endorsed  to  effect  that  on 
April  30  the  writ  had  been  served  on  each  of  the  Commissioners. 
Twenty- four  days  later  the  answer  of  each  Commissioner  was  filed; 
and  on  June  7  the  plaintiff  demurred  to  the  several  answers.  The 
Circuit  Court,  June  24,  overruled  the  plaintiff  as  to  the  first,  second. 


40  History  of  the  Cleveland  Sinking  Fund  of  1862 


third  and  fifth  defenses,  but  sustained  the  demurrer  as  to  the  fourth. 
Both  sides  took  exceptions;  and  five  days  later  the  Commissioners 
filed  an  amended  answer.  On  July  3  the  Court  gave  the  plaintiff 
until  August  14  (1897)  to  file  an  amended  petition.  On  that  date 
the  following  was  filed : 

"Theodore  L.  Strimple,  prosecuting  attorney  for  the  county  of 
Cuyahoga  and  state  of  Ohio,  now  comes  and  gives  the  court  to  under- 
stand and  be  informed  that  the  defendants,  William  Bingham,  Sylves- 
ter T.  Everett,  William  Edwards,  James  Barnett  and  Andrew  Squire 
are  and  have  been  for  a  long  time  past  unlawfully  holding  and  exer- 
cising the  following  rights,  privileges  and  franchises,  within  this  state, 
to- wit : 

1.  That  of  being  and  acting  as  the  sinking  fund  commissioners 
of  the  city  of  Cleveland,  which  said  city  is  a  municipal  corporation 
organized  under  the  laws  of  the  state  of  Ohio,  and  is  a  city  of  the 
second  grade  of  the  first  class,  and  as  such  sinking  fund  commissioners 
of  having  the  custody,  control  and  management  of  the  sinking  fund 
of  said  city,  of  the  value  of  more  than  one  million  dollars,  and  of 
doing  and  performing  all  other  acts  and  things  provided  to  be  done 
and  performed  by  the  sinking  fund  commissioners  of  said  city  by  an 
act  entitled  "An  act  to  authorize  the  city  of  Cleveland  to  fund  certain 
railroad  stocks,"  passed  by  the  general  assembly  of  Ohio,  March  28, 
1862,  with  the  amendments  thereto. 

2.  That  of  acting  as  trustees  of  the  sinking  fund  of  said  city, 
and  as  such  trustees  of  appointing  three  members  of  the  board  of 
park  commissioners  in  said  city,  provided  for  by  section  1  of  an  act 
entitled  "An  act  to  provide  a  board  of  park  commissioners,  and  to  pro- 
vide for  the  acquisition  of  grounds  for  parks,  park  entrances  and  park 
driveways,  and  for  the  improvement,  management  and  control  of 
parks,  park  entrances  and  park  driveways,  in  cities  of  the  second 
grade  of  the  first  class,"  passed  by  the  general  assembly  of  Ohio, 
April  5,  1893. 

And  the  said  relator  further  gives  the  court  to  understand  and 
be  informed  that  the  defendants  are  and  for  a  long  time  past  have 
been  unlawfully  exercising  public  offices  within  this  state  and  under 
the  name  and  style  of  sinking  fund  commissioners  of  the  city  of 
Cleveland,  under  the  pretended  authority  of  said  act  of  March  28, 
1862,  hereinbefore  referred  to,  and  as  such  of  exercising  all  the  powers 
conferred  or  attempted  to  be  conferred  upon  the  sinking  fund  com- 
missioners by  said  act  and  the  amendments  thereto. 

And  the  relator  gives  the  court  to  understand  and  be  informed 
that  the  said  defendants,  under  the  name  of  sinking  fund  commission- 
ers of  the  city  of  Cleveland,  are  and  for  a  long  time  past  acting  as 
a  corporation  within  this  state  without  being  legally  incorporated. 

And  the  relator  further  says  that  the  said  act  of  the  general 
assembly  entitled  'An  act  to  authorize  the  city  of  Cleveland  to  fund 
certain  railroad  stocks,'  passed  March  28,  1862,  is  in  conflict  with 
section  1,  of  article  13,  of  the  constitution  of  the  state  of  Ohio,  pro- 
viding that  the  general  assembly  shall  pass  no  special  act  conferring 
corporate  powers,  and  with  section  27,  of  article  2,  of  said  constitu- 


History  of  the  Cleveland  Sinking  Fund  of  1862 41 

tion  providing  that  the  election  and  appointment  of  all  officers  and 
the  filling  of  all  vacancies,  not  otherwise  provided  for  by  this  constitu- 
tion or  the  constitution  of  the  United  States,  shall  be  made  in  such 
manner  as  may  be  directed  by  law,  but  no  appointing  power  shall  be 
exercised  by  the  general  assembly,  except  as  prescribed  in  this  constitu- 
tion and  in  the  election  of  United  States  senators ;  and  with  section  6, 
of  article  13,  of  the  constitution  of  Ohio,  providing  that  all  laws  of 
a  general  nature  shall  have  a  uniform  operation  throughout  the  state, 
nor  shall  any  act,  except  upon  the  approval  of  any  other  authority  than 
the  general  assembly,  except  as  otherwise  provided  in  this  constitu- 
tion; and  that  said  act  of  March  28,  1862,  is  wholly  unconstitutionat 
and  void. 

And  the  relator  further  says  that  said  act  of  April  5,  1893, 
entitled  'An  act  to  provide  a  board  of  park  commissioners,  and  to 
provide  for  the  acquisition  of  grounds  for  parks,  park  entrances  and 
park  driveways,  and  for  the  improvement,  management  and  control  of 
parks,  park  entrances  and  park  driveways,  in  cities  of  the  second 
grade  of  the  first  class,'  is  in  conflict  with  the  same  sections  of  the 
constitution  of  the  state  hereinbefore  mentioned,  and  is  also  uncon- 
stitutional and  void  in  this,  among  other  things,  that  said  act  of  April 
5,  1893,  undertakes  to  grant  to  the  board  of  park  commissioners 
therein  provided  for,  the  power  to  select,  purchase,  appropriate  and 
enter  up)on  for  public  use  any  property  for  enlarging  any  park  or 
parks  owned  by  the  city,  for  which  they  are  appointed,  and  for  es- 
tablishing such  park  or  parks,  park  entrances  and  park  driveways  as 
in  the  opinion  of  said  board  it  may  be  necessary  from  time  to  time 
to  establish  either  within  or  without  the  limits  of  such  city,  and  to 
levy  and  assess  taxes  and  assessments  therefor  and  for  the  expense  of 
improving  and  maintaining  the  same ;  to  issue  bonds  for  the  purposes 
specified  in  said  act,  and  to  pledge  the  faith  of  the  city  and  said 
tax,  which  it  is  made  the  duty  of  said  board  to  its  successors,  annu- 
ally to  levy  on  the  real  and  personal  property  returned  on  the  grand 
duplicate  of  said  city;  to  adopt  rules  and  regulations  regulating  the 
use  of  said  parks,  park  entrances  and  park  driveways,  the  violation 
of  any  of  which  rules  or  regulations  is  by  said  act  made  a  misde- 
meanor punishable  as  therein  provided;  and  to  seize  and  impound 
animals  and  impose  a  penalty  upon  each  animal  so  seized  and  im- 
pounded, and  to  enforce  payment  thereof  in  such  manner  as  they 
shall  by  their  rules  and  regulations  provide;  all  without  the  consent 
or  authority  of  the  council  of  such  city  or  that  of  any  other  officer 
deriving  his  authority  from  the  electors  of  such  city,  and  without  the 
action  or  approval  of  the  electors  of  such  city  in  any  manner  what- 
ever, in  violation  of  sections  1,  2,  19  and  20  of  article  1,  of  said 
constitution. 

And  the  relator  further  says  that  said  defendants  derive  their 
pretended  authority  to  exercise  the  rights,  privileges  and  franchises 
aforesaid  from  said  act  of  March  28,  1862,  and  the  amendments 
thereto,  and  from  said  act  of  April  5,  1893,  the  said  William  Bingham 
being  one  of  the  persons  originally  named  as  a  commissioner  under  the 
said  act  of  March  28,  1862,  and  the  other  defendants  claiming  to  be 


42  History  of  the  Cleveland  Sinking  Fund  of  1862 

such  commissioners  under  and  by  virtue  of  appointment,  from  time 
to  time,  to  fill  vacancies  caused  by  the  death  of  Henry  B.  Payne, 
Franklin  T.  Backus,  William  Case  and  Moses  Kelley,  named  in  said 
act,  such  appointments  having  been  made  in  accordance  with  the  pro- 
visions of  said  act,  and  not  otherwise. 

Wherefore,  the  relator  prays  the  advice  and  judgment  of  the 
court  in  the  premises,  that  the  said  defendants,  and  each  of  them, 
be  compelled  to  answer  to  the  state  of  Ohio  and  show  by  what  war- 
rant they  exercise  the  rights,  privileges  and  franchises  and  the  public 
offices  within  this  state  as  aforesaid,  and  that  they  and  each  of  them 
be  ousted  and  altogether  excluded  therefrom." 

During  the  January  term  of  Court,  February  11,  1898,  the  attor- 
neys for  the  Commissioners  filed  the  answer  of  Mr.  William  Bing- 
ham as  follows: 

"The  defendant,  William  Bingham,  now  comes  and  for  his 
amended  answer  to  the  petition  of  the  plaintiffs  says  that  he  is  the 
William  Bingham  named  in  the  act  of  March  28,  1862,  entitled  an  act 
'to  authorize  the  city  of  Cleveland  to  fund  certain  railroad  stocks,' 
59  O.  L.  126,  as  one  of  the  sinking  fund  commissioners  appointed  by 
that  act. 

He  admits  that  the  city  of  Cleveland  is  now,  and  for  many  years 
has  been,  a  city  of  the  second  grade  of  the  first  class,  and  that  the 
defendants,  as  and  in  the  capacity  of  sinking  fund  commissioners 
of  said  city,  have  had  and  have  such  charge,  custody  and  control  and 
management  of  the  sinking  fund  of  said  city  referred  to  in  said  act, 
as  the  statute  directs  and  provided  for,  and  none  other. 

He  admits  that  the  sinking  fund  commissioners  of  said  city,  on 
the  26th  day  of  April,  1893,  appointed  Charles  H.  Bulkley,  John  F. 
Pankhurst  and  Amos  Townsend  as  and  to  be  members  of  the  park 
board  commission,  and  have  filled  by  appointment  all  vacancies  oc- 
curring in  said  board  under  and  in  the  exercise  of  the  authority  so 
to  do,  granted  by  the  act  of  April  5,  1893,  providing  for  a  board  of 
park  commissioners  in  cities  of  the  second  grade  of  the  first  class. 

He  further  admits  that  his  co-defendants  were  severally  and  re- 
spectively appointed  by  the  remaining  commissioners  with  the  remain- 
ing commissioners  with  the  approval  of  the  city  council  of  the  city 
of  Cleveland  to  fill  vacancies  occurring  from  time  to  time  in  said 
commission  by  the  death  of  a  sinking  fund  commission,  and  as  such 
vacancy  occurred. 

This  defendant  denies  all  and  each  of  the  remaining  allegations  of 
said  petition. 

Defense  No.  1.  This  defendant  further  says  that  on  the  15th 
day  of  April,  1862,  he  qualified  as  a  member  of  said  sinking  fund 
commission  by  the  execution  of  the  bond  required  by  the  fifth  section 
of  the  act  of  March  28,  1862,  and  thence  continuously  to  the  present 
time  has  actively  acted  as  a  member  of  the  said  commission  to  the 
knowledge  of  the  public  and  of  the  various  officers  of  said  city  and 
county,  including  the  relator  and  his  predecessors  in  office;  and  with 
like  knowledge  upon  the  part  of  the  public  and  of  said  officials,  during 
all  of  said  time  he  has  openly  and  continuously  exercised  all  the  rights, 


History  of  the  Cleveland  Sinking  Fund  of  1862 43 

privileges,  functions  and  duties  prescribed  by  said  act  of  March  28, 
1862,  and  the  amendment  thereof,  for  a  sinking  fund  commissioner 
to  perform.  This  defendant  therefore  avers  that  said  action  of  said 
plaintiff  was  not  commenced  within  thirty  years  after  the  alleged  cause 
of  ouster  or  action  arose. 

Defense  No.  2. — This  defendant  further  says  that  said  sinkmg 
fund  commission,  so  constituted  and  appointed,  has,  for  thirty-five 
years  and  more,  as  a  body  openly  used  and  exercised,  to  the  knowl- 
edge of  the  relator  and  his  predecessors  in  office,  and  of  the  general 
public  as  well,  all  the  powers,  rights  and  privileges  conferred  or  pur- 
porting to  be  conferred  by  said  act  of  March  28,  1862,  and  the  amend- 
ments thereof,  and  have  during  all  of  said  period  of  time  discharged 
the  functions  and  performed  the  duties  prescribed  by  said  act,  and 
by  it  directed  to  be  performed  by  said  sinking  fund  commission. 

Wherefore  this  defendant  avers  that  said  action  was  not  com- 
menced within  thirty  years  from  the  time  of  the  exercise  of  said 
powers  and  privileges  and  the  performance  of  said  duties  by  said 
commission  or  by  said  city. 

Defense  No.  3.  This  defendant  further  says  that  the  said  city  of 
Cleveland,  as  a  municipal  corporation,  has  continuously  and  uninter- 
ruptedly since  its  passage,  exercised  all  the  powers  and  discharged  all 
the  duties  prescribed  for  said  city  to  perform  by  the  act  of  March 
28,  1862,  and  since  the  passage  of  said  act,  a  period  now  of  more 
than  thirty-five  years,  said  city  has  exercised  every  power  and  fran- 
chise conferred  or  purporting  to  be  conferred  by  said  act  upon  said 
city,  and  has  performed  the  same  in  connection  with  and  through 
said  commission  and  by  no  other  agency  whatever.  This  defendant 
therefore  says  that  said  city  has  used  and  exercised  all  the  powers 
conferred  by  said  act  for  a  term  of  more  than  twenty  years  prior  to 
the  commencement  of  this  action. 

Defense  No.  4.  For  other  and  further  answer  to  the  petition 
this  defendant  further  says  that  under  and  in  pursuance  of  an  act 
of  the  legislature  passed  February  24,  1846,  the  city  of  Cleveland, 
through  commissioners  named  in  and  appointed  by  said  act,  subscribed 
for  $200,000,  par  value  of  the  capital  stock  of  the  Cleveland,  Colum- 
bus and  Cincinnati  Railroad  Company  and  issued  the  bonds  of  the  city 
thereon;  that  said  stock  was  duly  issued  to  said  city  and  became  its 
property ;  that  by  the  terms  of  said  act  Zalmon  Fitch,  John  M.  Wool- 
sey,  Richard  Hilliard,  Samuel  Williamson  and  Dudley  Baldwin  were 
appointed  commissioners  to  make  said  subscription,  and  among  other 
things  were  charged  with  the  duty  of  controlling  and  managing  the 
said  stock,  collecting  dividends  thereon  and  re-investing  the  same.  By 
a  similar  act  of  the  legislature,  passed  February  16,  1849  (Laws  of 
that  year,  p.  146),  the  city  was  authorized  to  make  a  similar  sub- 
scription through  commissioners  named  in  said  act,  of  $100,000,  to 
the  stock  of  the  Cleveland  and  Pittsburgh  Railroad  Company,  By 
said  act  last  named,  Moses  Kelley,  Elisha  T,  Sterling,  Philo  Scovill, 
Henry  W.  Clark  and  Harvey  Rice  were  constituted  and  appointed 
commissioners  with  similar  powers  respecting  said  stock  to  tho^e 
given  to  the  commissioners  above  named.     By  a  further  act  of  the 


44  History  of  the  Cleveland  Sinking  Fund  of  1862 

legislature  of  February  13,  1851  (Laws  of  that  year,  p.  502),  the 
city  was  further  authorized  through  commissioners  to  subscribe  $100,- 
000  to  the  stock  of  the  Cleveland,  Painesville  and  Ashtabula  Railroad 
Company,  this  act  having  been  approved  by  a  vote  of  the  people. 
Powers  were  given  to  the  commissioners  appointed  under  this  act 
similar  to  those  in  the  acts  last  above  named.  Melancton  Bamett, 
Hiram  B.  Wilson,  Arthur  Hughes,  Charles  Hickox  and  Oliver  H. 
Perry  were  by  said  act  appointed  commissioners  there  under. 

These  several  boards  of  commissioners  on  the  5th  day  of  June, 
1854,  and  for  some  years  before  and  after  said  date,  held  for  and  as 
agents  of  said  city  under  the  authority  conferred  by  said  several  acts 
a  large  amount  of  said  railroad  stock  so  issued  by  said  respective  com- 
panies and  said  railroad  stock  and  the  proceeds  therefrom  were  of 
large  value. 

Prior  and  up  to  said  date  of  June  5,  1854,  the  Cuyahoga  river 
was  the  western  boundary  of  the  city  of  Cleveland,  and  Wilson  Avenue 
was  the  eastern  boundary.  The  territory  lying  immediately  west  of 
the  Cuyahoga  river  was  known  as  and  embraced  the  'City  of  Ohio.' 
The  two  municipalities  had  long  before  then  been  incorporated  under 
the  laws  of  the  state,  and  the  territory  of  the  city  of  Ohio  was 
contiguous  to  the  city  of  Cleveland,  and  a  short  time  prior  to  the  said 
5th  of  June,  A.  D.  1854,  the  proper  action  was  taken  by  ordinance 
passed  for  that  purpose  by  the  respective  cities  submitting  to  the  quali- 
fied voters  of  the  said  cities  the  question  of  the  annexation  of  the 
city  of  Ohio  to  the  city  of  Cleveland  in  pursuance  of  the  provisions 
of  section  15  of  the  act  entitled  an  'act  to  provide  for  the  organiza- 
tion of  cities  and  incorporated  villages,'  passed  May  3,  1852,  and 
the  action  taken  by  said  cities  in  the  premises  conformed  strictly  to 
the  statute  made  and  provided  for  such  purpose,  and  at  said  election  a 
majority  of  the  qualified  voters  of  the  said  municipalities  voted  in 
favor  of  such  annexation.  And  thereupon  the  council  of  each  of  said 
cities  appointed  commissioners  to  arrange  the  terms  and  conditions  of 
such  annexation  as  required  by  said  section  of  the  act  last  named. 
And  said  commissioners  agreed,  among  other  things,  upon  the  an- 
nexed terms  of  annexation,  which  were  submitted  for  approval  to 
the  council  of  the  respective  corporations,  and  was  by  the  council  of 
each  of  said  corporations  duly  approved  by  an  ordinance  passed  for 
such  purpose  by  each  municipality.  Such  further  steps  were  taken 
as  were  required  by  said  section  to  complete  said  annexation  of  said 
city  of  Ohio  to  said  city  of  Cleveland,  A  true  copy  of  the  agreement 
containing  the  terms  and  conditions  of  annexation  is  hereto  attached 
and  marked  "Exhibit  A,"  and  made  a  part  of  this  answer. 

By  section  or  article  6  of  said  agreement  or  terms  of  annexa- 
tion it  was  provided: 

"All  railroad  stocks  now  held  by  the  city  of  Cleveland,  and  all 
rights  growing  out  of  the  ownership  thereof  and  of  such  as  have 
heretofore  been  owned  by  said  city  of  Cleveland,  shall  be  and  remain 
the  exclusive  property  of  that  portion  of  the  territory  of  such  united 
city  which  now  constitutes  the  city  of  Cleveland,  the  avails  of  which 
shall  be  applied  to  the  extinguishment  of  the  liabilities  of  said  city 


History  of  the  Cleveland  Sinking  Fund  of  1862 45 

of  Cleveland,  heretofore  incurred  by  subscriptions  to  railroad  stocks, 
and  the  issue  of  bonds  or  other  liabilities  of  said  city  of  Cleveland 
in  payment  of  said  subscriptions.  Should  a  surplus  remain  after  the 
application  of  so  much  of  the  last  named  assets  to  the  extinguishment 
of  the  said  last  named  liabilities  as  shall  be  necessary  for  that  pur- 
pose, such  surplus  shall  be  appropriated  to  the  special  benefit  of  said 
territory  now  composing  the  city  of  Cleveland,  either  by  the  purchase 
of  public  parks  therein,  or  in  such  other  manner  as  the  majority  of 
the  trustees  representing  such  territory  shall  direct.  Should  it  ever 
be  necessary  to  resort  to  other  means  than  said  assets  to  take  care  of 
said  liabilities  the  amount  necessary  for  such  purpose  shall  be  raised 
by  a  tax  upon  the  property  embraced  in  such  territory  exclusively." 

This  defendant  further  says  that  the  great  bulk  of  all  the  fund 
that  came  into  the  custody  or  hands  of  the  sinking  fund  commission 
created  by  the  act  of  March  28,  1862,  consisted  in  the  shares  of  stock 
aforesaid  and  the  proceeds  therefrom  of  said  railroad  companies,  which 
were  by  the  respective  commissions  above  named  transferred  and  de- 
livered to  the  commission  composed  of  this  defendant  and  his  asso- 
ciates, created  by  the  act  of  March  28,  1862,  in  pursuance  of  its 
terms  and  provisions  authorizing  and  requiring  them  so  to  do. 

This  defendant  further  says  that  a  considerable  portion  of  the 
funds  now  in  the  custody  and  control  of  said  sinking  funds  commis- 
sion is  the  product  and  proceeds  of  investments  made  of  the  funds 
arising  from  the  sale  of  said  railroad  stocks. 

He  further  says  that  by  the  terms  and  conditions  of  said  annexa- 
tion the  said  sinking  fund  commission  hold  said  fund,  as  he  advised 
by  counsel,  in  trust  for  the  purposes  named  and  described  by  said 
article  6  of  said  agreement  of  annexation  between  said  two  cities,  and 
that  the  same  is  not  a  fund  in  which  the  entire  city  of  Cleveland  has 
an  interest,  but  that  the  duties  of  the  commissioners  in  reference 
thereto  are  such  as  are  defined  by  and  grow  out  of  the  provisions  of 
said  section  or  article  6  of  said  terms  of  annexation. 

This  defendant  further  says  that  by  the  first  section  of  the  act 
of  1862  and  of  the  sections  amendatory  thereof,  it  was  and  is  pro- 
vided, that  the  funds  arising  from  said  railroad  stock  or  any  bonds 
taken  therefor,  or  any  proceeds  thereof  then  in  the  hands  of  said  city 
commissioners,  and  the  interest  and  dividends  thereafter  to  accrue 
on  the  same,  after  paying  the  expenses  of  the  trust  created  by  said 
act,  should  be  set  apart  exclusively  for  the  payment  of  the  principal  of 
the  water  works  bonds  theretofore  issued  by  said  city  in  conformity 
with  the  provisions  of  article  6  of  the  terms  of  annexation  between 
the  city  of  Cleveland  and  the  said  city  of  Ohio,  agreed  upon  by  the 
commissioners  of  said  cities  on  the  5th  day  of  June,  A.  D.  1854,  and 
that  the  same  should  be  used  for  no  other  purpose  whatsoever. 

It  was  further  agreed  that  said  stocks,  shares  and  bonds  and  the 
accumulated  interest  and  dividends  on  the  same  so  forming  said  fund, 
should  be  placed  in  the  custody  and  under  the  control  of  five  com- 
missioners thereafter  to  be  named  and  called  the  sinking  fund  com- 
missioners, whose  duty  it  should  be  to  take  charge,  custody  and  con- 
trol of  the  same  and  manage  the  same  according  to  the  provisions  of 


46  History  of  the  Cleveland  Sinking  Fund  of  1862 

said  act.  Henry  B.  Payne,  Franklin  T.  Backus,  William  Case,  Mose& 
Kelley  and  this  defendant  and  their  successors  were  by  said  act  con- 
stituted commissioners  under  its  provisions. 

This  defendant  further  says  that  the  city  of  Cleveland  in  its 
territorial  extent  at  the  present  time  extends  easterly  far  beyond  the 
limits  of  Wilson  Avenue,  and  westerly  far  beyond  the  limits  of  the 
city  of  Ohio  at  the  time  of  its  annexation,  and  embraces  territory 
nearly,  if  not  quite,  double  in  extent  of  the  territory  embraced  by  it 
at  the  time  of  such  annexation,  which  extended  territory  is  inhabited 
by  a  large  number  of  people  not  entitled  to  participate  in  said  fund, 
and  members  of  the  city  council  representing  parts  of  wards  of  said 
city  have  no  voice  whatever  in  the  disposition  to  be  made  of  said  fund. 

This  defendant  further  says  that  the  legislature  of  Ohio,  by  valid 
constitutional  enactments,  has  repeatedly  recognized  said  sinking  fund 
commission  as  a  lawfully  constituted  body,  and  said  sinking  fund  as 
properly  in  its  hands;  and  has  devolved  upon  said  commissioners  to 
an  action  on  their  respective  bonds  given  for  the  faithful  performance 
of  their  duties  as  such  commissioners. 

By  an  act  of  June  19,  1882,  to  amend  an  act  of  March  28,  1862, 
it  was  provided : 

'That  in  cities  of  the  second  grade  of  the  first  class,  funds  in 
the  hands  of  the  commissioners  of  the  sinking  fund  of  1862,  so  called, 
shall,  when  set  apart  by  ordinance  for  any  particular  purpose,  be 
deemed  as  money  in  the  treasury  for  such  purpose  within  the  meaning 
of  the  section.' 

By  the  same  act  it  was  provided : 

'That  in  cities  of  the  second  grade  of  the  first  class  such  loan  as 
aforesaid,  may  be  made  by  the  sinking  fund  commissioners  of  such 
city,  out  of  the  sinking  fund  of  1862,  so-called,  whether  the  special 
assessment  is  payable  in  annual  installments  or  otherwise,  and  such 
notes  or  certificates  of  indebtedness  may  be  payable  to  said  commis- 
sioners; and  so  much  of  the  proceeds  of  such  special  assessments  as 
may  be  required,  shall,  when  received  by  the  city,  be  paid  over  to  said 
commissioners  in  liquidation  of  said  notes  or  other  obligations.' 

This  defendant  further  says  that  the  expression  'such  loan'  as 
used  in  the  above  provision,  related  to  a  loan  to  be  made  by  the  coun- 
cil in  anticipation  of  annual  installments  levied  to  pay  for  street 
improvements. 

This  defendant  further  says  that  the  legislature,  by  an  act  passed 
April  13,  1883,  declared  the  funds  in  the  hands  of  said  sinking  fund 
commissioners  created  by  the  act  of  1862,  so  called,  should,  when  set 
apart  by  ordinance  for  any  particular  purpose,  be  deemed  as  money 
in  the  treasury  for  such  purpose,  within  the  meaning  of  section  2702 
of  the  Revised  Statutes.  And  said  legislature  enacted  a  similar  pro- 
vision April  15,  1889,  in  relation  to  said  fund.  And  by  section  71  of 
the  act  of  March  16,  1891,  entitled  'An  act  to  provide  for  the  more 
efficient  government  for  cities  of  the  second  grade  of  the  first  class,' 
being  the  statute  creating  the  so-called  federal  plan  for  the  govern- 
ment for  cities  of  said  grade  of  the  first  class,  it  was  provided,  'That 


History  of  the  Cleveland  Sinking  Fund  of  1862  47 

the  sinking  fund  commissioners    *    *  *    shall  continue  as  now  estab- 
lished by  law.'    The  commissioners  referred  to  were  the  defendants. 

These  defendants  further  say  that  under  and  by  virtue  of  said 
act  of  June  10,  1882,  above  referred  to,  authorizing  said  sinking  fund 
commission  so  to  do,  it  loaned  from  time  to  time  to  said  city  a  sum 
exceeding  $100,000  for  said  fund.  This  defendant  further  says  that 
under  the  management  and  fortunate  investments  from  time  to  time 
of  the  said  original  fund  by  said  sinking  fund  commission,  the  sum 
has  been  increased  and  augmented  from  less  than  four  hundred  thou- 
sand dollars  to  over  three  million  dollars.  He  further  says  that  at 
the  time  said  act  of  March  22,  1862,  was  passed,  the  said  fund  received 
by  said  sinking  fund  commission  amounted  to  $332,059.07,  and  no 
more,  and  the  water  works  debt  of  the  city  of  Cleveland  then  existing 
and  to  the  payment  of  which  said  fund  was  made  applicable,  amounted 
to  $550,000,  drawing  interest  at  6  per  cent  per  annum.  This  defendant 
further  says  that  by  the  foregoing  provisions  the  said  sinking  fund 
commission  was  and  is  not  only  treated  as  a  lawfully  constituted  and 
existing  body  by  statutes  general  in  character,  which  in  terms  obviated 
the  objection  that  said  act  is  local  and  not  general,  but  they  are 
expressly  authorized  and  required  to  loan  said  fund  derived  under  the 
act  of  1862,  and  are  charged  with  the  duty  of  disbursement  with 
reference  thereto  in  the  manner  provided  by  said  act. 

Wherefore  this  defendant  says  that  the  said  plaintiff  is  not  only 
estopped  from  maintaining  said  action  on  account  of  the  alleged  in- 
validity of  the  act  of  1862,  but  said  action  is  barred  by  the  statute  of 
limitations  contained  in  section  6789  of  the  statutes. 

This  defendant  further  says  that  said  sinking  fund  commission 
has  now  under  its  charge  and  control,  investments  belonging  to  said 
fund  amounting  to  upwards  of  $1,500,000,  most  of  which  is  invested  in 
bonds  of  said  city,  and  there  is  no  person  or  body  of  persons  or  cor- 
poration that  has  by  statute  any  right  to  take  the  charge  or  control 
of  the  same  if  such  fund  should  be  withdrawn  from  the  custody  and 
control  of  said  commission. 

Wherefore,  this  defendant,  having  here  fully  shown  by  what  war- 
rant he  is  exercising  the  powers  referred  to  in  the  petition  of  the 
plaintiflF,  and  that  their  exercise  is  lawful,  prays  that  the  petition  of 
the  plaintiflF  may  be  dismissed  at  the  cost  of  the  relator." 

On  March  22,  1898,  the  answer  of  Mr.  Andrew  Squire  was  filed. 
He  set  up  one  defense  as  follows : 

"For  defense  number  1  to  the  petition  of  the  plaintiff  this  de- 
fendant further  says  that  he  here  adopts  as  his  further  answer  to 
the  petition  of  the  plaintiff  all  the  facts  and  allegations  set  forth  in 
defenses  numbers  three,  four  and  five  in  the  answer  of  his  co-defend- 
ant, William  Bingham,  filed  in  said  cause,  and  here  alleges  said  facts 
therein  stated  to  be  true,  and  prays  the  court  to  give  the  same  effect 
to  said  facts  in  behalf  of  this  defendant  as  if  here  fully  stated  and 
set  forth." 

On  May  22  the  answers  of  Mr.  S.  T.  Everett,  William  Edwards 
and  James  Bamett  were  filed.  In  the  first  defense  they  accepted  and 
made  their  own  defenses  three  and  four  of  Mr.  William  Bingham, 


48  History  of  the  Cleveland  Sinking  Fund  of  1862 

and  then  set  up  two  additional  defenses  as  follows:  (2)  "For  their 
further  defense  these  defendants  aver  that  they  were  severally  duly 
appointed  to  fill  vacancies  in  said  sinking  fund  commission  occurring 
by  death  of  its  members,  and  said  appointment  was  made  in  the  man- 
ner provided  by  the  5th  section  of  said  act  of  March  28,  1862.  And 
they  say  they  were  severally  appointed  and  qualified  by  execution  of 
the  required  bond,  more  than  six  years  before  the  commencement  of 
said  action,  and  upon  such  appointment  they  severally  entered  upon 
the  duties  enjoined  by  said  act  and  the  acts  amendatory  thereof  upon 
the  said  sinking  fund  commission,  and  thence  hitherto  have  been  and 
now  are  in  the  actual  performance  of  the  duties  enjoined  upon  said 
sinking  fund  commission  by  said  acts. 

They  therefore  aver  that  if  they  severally  are  officers  as  alleged 
in  the  petition  in  this  action,  said  action  was  not  brought  within  six 
years  after  the  alleged  cause  of  ouster  or  the  right  to  hold  said  office 
arose,  hence  they  allege  that  said  action  is  barred  by  section  6789  of 
the  Revised  Statutes.  (3)  For  their  further  defense  these  defendants 
say  that  the  legislature  of  Ohio,  by  valid  and  constitutional  enact- 
ments, has  repeatedly  recognized  said  sinking  fund  commission  as  a 
lawfully  constituted  body,  and  said  sinking  fund  was  properly  in  its 
hands ;  and  has  devolved  upon  said  commissioners  duties  and  require- 
ments relating  to  the  disbursement  of  said  fund,  to  disregard  which 
would  subject  them  to  an  action  on  their  respective  bonds  given  for 
the  faithful  performance  of  their  respective  duties  as  such  commis- 
sioners." The  plaintiff  demurred  to  these  answers  and  on  July  1  the 
case  was  heard  in  Circuit  Court.  The  Court  overruled  the  demurrer, 
holding  that  the  answers  were  a  good  defense  to  the  relator's  cause 
of  action ;  and  judgment  for  costs  were  rendered  against  the  relator. 
Exception  was  taken  by  the  relator  to  the  findings  and  judgment,  and 
on  October  27,  this  same  year  (1898),  the  plaintiff  filed  a  petition  in 
error  with  the  Supreme  Court. 

In  this  petition  the  plaintiff  set  up  four  pleas:  (1)  That  the 
Court  erred  in  overruling  the  demurrer  of  the  plaintiff  to  the  answer 
of  Mr.  William  Bingham  to  the  amended  petition.  (2)  That  the 
Court  erred  in  overruling  the  demurrer  of  the  plaintiff  to  the  answer 
of  S.  T.  Everett,  William  Edwards  and  James  Barnett.  (3)  That 
the  Court  erred  in  overruling  the  demurrer  to  the  answer  of  Andrew 
Squire.  (4)  That  the  judgment  was  given  to  the  defendants  when  it 
should  have  been  given  to  the  plaintiff.  (5)  That  the  judgment  was 
contrary  to  law.  "Whereof  the  plaintiff  in  error  prays  that  said  judg- 
ment may  be  reversed  and  that  it  may  be  restored  to  all  things  it  has 
lost  by  reason  thereof." 

In  1879  the  General  and  Viaduct  Sinking  Funds  passed  under  the 
care  and  management  of  the  Commissioners  of  the  Sinking  Fund  of 
1862.^^  The  fidelity  and  sagacity  with  which  the  Commissioners  ad- 
ministered these  funds  gave  them  in  1895  an  additional  responsibility. 
On  April  13,  President  Payne  laid  before  the  Board  an  ordinance  to 
create  a   sinking  fund   for  the  payment   of  bonds  which   should  be 

88  Chapter  V.,  p.  24. 


History  of  the  Cleveland  Sinking  Fund  of  1862  49 

used  for  the  purpose  of  erecting  and  furnishing  a  City  Hall.  This 
ordinance  was  passed  by  the  City  Council  April  2,  and  was  approved 
by  the  Mayor  two  days  later.  The  Commissioners  voted  to  accept 
the  trust ;  and  authorized  the  President  of  the  Board  to  invest  the 
fund  in  City  of  Cleveland  notes  issued  for  street  improvement  purposes 
at  par,*'  The  first  annual  report  of  the  Commissioners  of  this  fund 
showed  that  on  January  1,  1896,  that  the  following  items  constituted 
the  City  Hall  Sinking  Fund: 

Cleveland  City  5  per  cent  notes $113,960.00 

Cleveland  City  5  per  cent  bonds 14,000.00 

Cash  on  deposit  in  bank , 642.54 

Total    $128,602.54 

In  this  decade  three  vacancies  were  created  in  the  Commission 
by  death.  In  1890,  J.  H.  Wade  died  and  on  September  22,  General 
James  Bamett'"  was  appointed  his  successor.  Mr.  Wade  was  ap- 
pointed January  2,  1871,  to  succeed  Franklin  T.  Backus,  one  of  the 

"» This  fund  was  provided  for  by  Ordinance  Number  5876.  On  April 
IS,  the  President  received  $100,000.00  from  the  City  Treasurer;  and  on 
August  15,  $25,807.83.  On  October  1,  the  Commission  received  $350.00 
semi-annual  interest  on  $14,000  Cleveland  City  5  per  cent  bonds;  and  on 
November  1,  $2,707.21  interest  on  $99,960  Cleveland  City  5  per  cent  notes. 
The  growth  of  this  fund  and  its  use  will  be  considered  with  that  of  Gen- 
eral and  Viaduct  Sinking  Funds  in  the  final  chapter  of  this  monograph. 

"<>  General  James  Barnett,  merchant  and  soldier,  was  born  January  21, 
1821,  at  Cherry  Valley,  Otsego  County,  New  York.  He  was  the  son  of 
Melancthon  Barnett,  merchant  and  afterwards  banker  who  died  July  1, 
1881.  Melancthon  Barnett  came  to  Cleveland  in  1826,  and  here  James  Bar- 
nett attended  the  public  schools  from  which  he  received  his  entire  academic 
education.  While  still  a  boy  he  entered  the  hardware  store  of  Potter  & 
Clark,  where  he  remained  for  three  years.  Then  he  took  employment  in 
the  house  of  George  Worthington  and  in  due  course  of  time  became  a  mem- 
ber of  the  firm  of  George  Worthington  &  Company,  an  association  which 
continued  to  his  death.  Quite  early  Mr.  Barnett  became  interested  in  mili- 
tary matters  and  became  a  member  of  an  artillery  company  that  was 
organized  in  1840.  Eighteen  years  later  this  company  developed  into  the 
first  regiment  of  Ohio  volunteer  light  artillery  and  was  known  as  the 
"Cleveland  Light  Artillery,"  Mr.  Barnett  receiving  the  commission  as 
Colonel  in  1859.  When  the  Civil  War  began  Mr.  Barnett  entered  with  the 
rank  of  Colonel.  He  served  until  October  20,  1864,  when  he  was  mustered 
out  and  made  a  brevet  brigadier  general.  On  his  return  home  he  resumed 
business  in  the  firm  of  which  he  had  continued  a  member  throughout  the 
war.  In  1870  he  was  appointed  by  the  Governor  as  one  of  the  trustees  of 
Soldiers*  and  Sailors'  Orphans  Home  at  Xenia.  Later  he  was  appointed  by 
Governor  Allen  as  one  of  the  directors  of  the  Cleveland  Asylum  for  the  In- 
sane and  served  for  seven  years.  It  should  be  noted  too  that  when  in  1865 
the  police  of  the  City  of  Cleveland  were  re-organized  under  the  Metropolitan 
Police  System,  he  was  appointed  by  Governor  R.  B.  Hayes  as  one  of  the 
Commissioners.  He  became  a  director  of  the  First  National  Bank  of 
Cleveland  in  January,  1872;  and  four  years  later  (1876)  he  was  elected  its 
president.  He  became  a  member  of  the  City  Council  in  1873  and  served 
two  years.  His  business  career  was  chiefly  identified  in  the  iron  manu- 
facturing interests,  banking  and  wholesale  hardware  trade.  While  a  busy 
man,  he  always  had  time  to  take  an  active  interest  in  public  affairs  and  was 
ever  interested  in  all  that  concerned  his  city,  state  and  nation.  See  His- 
torical and  Biographical  Cyclopaedia  of  the  State  of  Ohio.  (Cincinnati, 
1884)  5  Vols.    Vol.  II,  page  369. 


50  History  of  the  Cleveland  Sinking  Fund  of  1862 

original  Commissioners.  At  a  meeting  of  the  Commissioners  Septem- 
ber 18,  1896,  Mr.  William  Bingham  announced  the  death  of  Honorable 
H.  B.  Payne,  "former  President  of  the  Sinking  Fund  Commission, 
and.  spoke  concerning  the  long  connection  with  the  Sinking  Fund  and 
efficient  services  rendered  by  him  as  President  of  that  body.""^  Gen- 
eral James  Barnett  was  made  temporary  chairman  of  the  meeting.  A 
resolution  was  offered  by  Mr.  Everett  and  seconded  by  Mr.  Edwards 
that  Mr.  William  Bingham  be  elected  President  to  succeed  the  late 
Senator  Payne.  This  was  unanimously  adopted.  General  Barnett  and 
Mr.  Edwards  offered  the  following  resolution: 

"Tributes  have  been  paid  to  the  memory  of  our  late  President, 
Henry  B.  Payne,  by  the  Bar  and  various  commercial  and  other  or- 
ganizations with  which  he  was  in  life  connected.  Brilliant  as  a  lawyer, 
successful  in  business  enterprises  of  value  to  the  community  far  be- 
yond any  personal  advantage,  a  commanding  figure  in  national  politics, 
his  services  to  the  nation  as  a  war  Democrat  and  in  other  great  emer- 
gencies, his  services  in  high  official  station,  his  usefulness  in  this 
community  as  a  citizen,  have  all  been  recorded  in  appreciation  and 
gratitude. 

We  note  the  single  feature  of  his  busy  and  eventful  life  in  which 
he  was  associated  as  one  of  this  Commission — this  work  for  the 
development  and  better  government  of  the  community  in  which  he 
lived. 

When  this  Commission  was  formed  in  1862,  Mr.  Payne  was  held 
in  such  high  regard  that  he  was  naturally  selected  by  the  Legisla- 
ture as  one  of  its  members.  Though  not  in  robust  health  and  already 
burdened  with  many  and  important  duties,  he  accepted  the  trust  and 
became  the  President  of  the  Commission.  Largely  by  his  wise  judg- 
ment and  marked  business  ability,  the  policy  of  the  Commission  was 
determined;  and  ever  since,  until  his  death,  he  gave  ungrudgingly  of 
his  time  and  counsel  to  the  work  of  the  Commission  and  beyond  this, 
was  earnest  and  effective  in  whatever  promised  better  methods  in 
local  government. 

In  our  close  association  with  him  we  not  only  learned  to  respect 
his  ability  and  to  appreciate  the  interest  he  displayed  in  the  welfare 
of  our  City,  but  to  love  him  for  his  courteous,  generous  and  helpful 
fellowship;  and  we  here  reverently  and  gratefully  add  our  tribute  of 
affection  and  respect  to  one  who  for  so  many  years  in  such  ample 
measure  fulfilled  all  the  obligations  incident  to  his  office  in  the  Com- 
mission as  well  as  that  of  good  citizenship  and.  Be  it  Resolved,  That 
this  memorial  be  spread  upon  the  records  of  the  Commission,  and  that 
a  copy  be  furnished  to  the  family  of  Mr.  Payne  by  the  Secretary."®^ 

At  this  same  meeting  on  motion  of  Mr.  Everett  and  seconded  by 
Mr.   Edwards,    Mr.   Andrew   Squire   was   elected   a  member   of   the 


^1  Journal  of  Proceedings  of  Sinking  Fund  Commissioners. 
®2  Journal  of  Proceedings  of  the  Sinking  Fund  Commissioners.     Meet- 
ing September  19,  1896. 


History  of  the  Cleveland  Sinking  Fund  of  1862 51 

Commission  to  fill  the  vacancy  caused  Ity  the  death  of  Mr.  Payne." 
On  September  21,  1898,  the  third  vacancy  occurred  in  the  death  of 
Mr.  William  Edwards,  who  had  served  on  the  Commission  since  June 
of  1890.  Mr.  Andrew  Squire  at  a  meeting  of  the  Commission  October 
1,  offered  the  following  resolution,  which  was  seconded  by  General 
Barnett  and  unanimously  adopted:  "We  desire  to  express  upon  the 
records  of  this  Commission  our  appreciation  of  the  services  which 
he  rendered  in  connection  with  the  duties  devolving  upon  him  as  a 
member  of  our  body.  Especially  will  we  always  remember  the  spirit 
of  good  fellowship  which  prevailed  at  all  the  meetings  which  he 
attended  and  to  which,  in  so  large  a  measure,  he  contributed. 

His  desire  in  connection  with  his  duties,  was  invariably  to  benefit 
the  City  and  the  trust  which  devolved  upon  him.  He  was  appointed 
to  this  commission  a  little  more  than  eight  years  ago,  because  he  then 
had  the  entire  respect  and  confidence  of  this  community,  which  re- 
spect and  confidence  in  his  faithfulness  and  in  his  integrity  increased 
as  the  years  have  passed.  We  had  hoped  for  his  companionship  for 
many  years  to  come,  but  as  death  has  removed  him,  we  can  only  pay 
our  respect  to  his  memory  as  a  lovable,  upright,  useful  citizen. 

We  request  our  Secretary  to  prepare,  and  our  Agent  to  deliver, 
to  Mrs.  Edwards,  for  herself  and  family,  a  copy  of  this  tribute."  On 
motion  of  General  Barnett,  seconded  by  Mr.  Andrew  Squire,  Judge 
Samuel  E.  Williamson  was  appointed  successor  to  Mr.  Edwards."* 

»»  Mr.  Andrew  Squire  is  a  native  of  Mantua,  Portage  County,  Ohio.  He 
was  born  October  21,  1850,  and  is  the  son  of  Doctor  Jackson  and  Martha 
(Wilmont)  Squire.  He  attended  District  School  at  Mantua  until  eleven  years 
old  and  then  went  to  the  Western  Reserve  Eclectic  Institute  at  Hiram.  He 
graduated  from  Hiram  College  in  1872  and  in  October  of  that  year  entered 
the  law  office  of  Cadwell  &  Marvin,  Cleveland.  He  was  admitted  to  the 
Bar  December  3,  1873,  after  passing  the  required  examination  before  the 
Supreme  Court  at  Columbus.  Upon  Mr.  Cadwell's  election  to  the  Com- 
mon Pleas  bench,  he  became  the  partner  of  Mr.  Marvin.  In  1878  this  firm 
became  Marvin,  Hart  and  Squire.  Eventually  Mr.  Squire  (1882)  became  the 
partner  of  Mr.  Estep.  In  the  next  year  this  firm  was  strengthened  by  the 
addition  of  Judge  Dickey,  under  the  firm  name  of  Estep,  Dickey  and 
Squire.  On  January  1,  1890,  Mr.  Squire  left  this  firm  to  become  the  senior 
member  of  a  new  firm,  Squire,  Sanders  and  Dempsey.  Mr.  Squire  is  a 
distinguished  member  of  the  Ohio  Bar  and  has  made  a  specialty  of  Cor- 
poration Law.  He  is  identified  with  the  business  and  educational  interests 
of  Cleveland.  He  is  a  member  of  the  Board  of  Trustees  of  Western 
Reserve  University  and  of  Case  Library.  (History  of  Cleveland,  by  S.  P. 
Orth,  Vol.  Ill,  p.  130;  also  Biographical  Volume  of  Kennedy's  History  of 
Cleveland,  p.  209.) 

'*  Samuel  E.  Williamson  was  born  in  Cleveland,  April  19,  1844.  His 
parents  were  Samuel  Williamson  and  Mary  E.  Tisdale.  He  was  favored 
with  excellent  educational  opportunities.  After  attending  the  public  schools 
until  he  was  sixteen  he  entered  Western  Reserve  College  and  graduated  in 
1864  at  the  age  of  twenty.  Then  for  two  years  he  studied  law  diligently  in 
his  father's  office.  In  1866  he  went  to  Cambridge,  Massachusetts,  and  spent 
one  year  in  the  Harvard  Law  School.  After  passing  the  Bar  examination, 
he  was  admitted  to  practice  in  1867.  He  formed  a  law  partnership  with  his 
father;  and  some  years  later  became  associated  in  a  partnership  with  T.  K. 
Bolton  and  still  later  with  J.  E.  Ingersoll.  He  was  connected  with  Mr. 
Ingersoll  until  1880,  when  he  was  elected  Judge  of  the  Court  of  Common 
Pleas.  He  remained  in  this  office  two  years  and  then  resigned  to  accept 
the  position  of  General  Solicitor  of  the  New  York,  Chicago  and  St.  Louis 


VII. 

THE  FUND  AND  ITS  USE 
1900-1913 

On  January  1,  1900,  the  total  assets  of  the  Fund  were  $1,742,- 
978.75.  During  the  next  six  years  the  growth  was  rapid.  In  no  year 
was  the  net  gain  less  than  $76,351.06  and  it  rose  as  high  as  $91,463.86. 
The  following  tables  give  the  net  gain  by  years  and  the  total  assets 
January  1  of  the  year  following: 

Net  Gain 

1900    $     79,539.30 

1901  76.351.06 

1902  84,525.12 

1903  88,604.59 

1904 91.463.86 

1905  77.063.27 

Total  Assets 

January  1,  1901 $1,822,518.05 

January  1,  1902 1,898,869.11 

January  1,  1903 1,983,394.23 

January  1,  1904 2,071,998.82 

January  1,  1905 2,163.462.68 

January  1,  1906 2.240,525.95 

On  Saturday,  February  21,  1903,  Honorable  Samuel  E.  William- 
son died.  Judge  Williamson  had  been  a  member  of  the  Commission 
since  October  1,  1898.  At  a  meeting  of  the  Commission,  March  12, 
Mr.  Charles  F.  Brush  was  elected  his  successor.^'^  At  this  same  meet- 
ting  Mr.  Andrew  Squire  submitted  the  following  testimonial  relative 
to  Judge  Williamson,  which  was  unanimously  adopted : 

"Judge  Williamson  was  a  man  of  rare  ability  and  scholarly  attain- 
ments ;  a  high  minded,  public-spirited  citizen,  whose  services  to  the 
community  at  large  in  the  different  positions  of  trust  in  which  he 

Railroad.  Judge  Williamson  was  a  lawyer  of  high  standing.  He  was  a 
patron  of  Education  and  was  a  member  of  the  Board  of  Trustees  of  West- 
ern Reserve  University  and  Case  Library.  Bench  and  Bar  of  Ohio,  Vol. 
II,  pp.  218-219. 

^'^  Charles  F.  Brush,  scientist,  was  born  at  Euclid,  Ohio,  March  17,  1849. 
He  was  the  son  of  Colonel  Isaac  Elbert  and  Delia  W.  (Phillips)  Brush. 
He  graduated  at  the  University  of  Michigan  in  1869  and  received  the  de- 
gree of  Doctor  of  Philosophy  from  Western  Reserve  University  in  1880. 
From  1870  to  1873  he  was  a  chemical  expert  at  Cleveland.  He  was  a  pio- 
neer investigator  of  electric  lighting  and  invented  the  Brush  electric  arc 
light  in  1878;  also  the  storage  battery  and  other  devices  essential  to  modern 
electrical  engineering.  He  was  the  founder  of  the  Brush  Electric  Com- 
pany. He  is  credited  with  "The  Practical  Development  of  Electric  Arc 
Lighting  (Rumford  Medal)."  He  has  been  President  of  the  Cleveland 
Arcade  Company  since  1887,  and  is  a  trustee  of  both  Western  Reserve 
University  and  University  School.  Who's  Who  in  America,  1912-1913, 
p.  271. 


History  of  the  Cleveland  Sinking  Fund  of  1862 53 

served,  where  a  knowledge  of  men  and  affairs  and  sound  judgment 
were  required,  and  particularly  of  this  Commission,  cannot  be  too 
highly  estimated. 

It  is  the  desire  of  this  body  to  set  forth  on  its  records  its  appre- 
ciation of  his  valued  services,  to  testify  to  the  esteem  in  which  he 
was  held,  and  to  express  the  deep  sense  of  personal  loss  each  mem- 
ber feels  in  his  death,  and  moved  that  the  same  be  adopted  and 
spread  upon  the  minutes  as  the  testimonial  of  this  Commission." 

In  the  next  year  another  vacancy  occurred  in  the  Commission 
when,  on  April  17th,  Honorable  William  Bingham,  the  last  of  the 
five  commissioners  named  in  the  Act  of  March  28,  1862,  died.""  At 
a  meeting  of  the  Commission,  May  16  (1904),  Mr.  Charles  W.  Bing- 
ham was  appointed  successor  to  Mr.  William  Bingham.'^  At  the 
same  meeting  on  motion  of  Mr.  Everett,  seconded  by  Mr.  Brush,  the 
following  testimonial  was  unanimously  adopted :  "In  the  passing  away 
of  William  Bingham  this  organization  loses  the  last  of  the  original 
members  of  the  Sinking  Fund  Commission  of  the  City  of  Cleveland. 
This  Commission  was  organized  in  1862,  and  the  members  composing 
the  first  Commission  were  H.  B.  Payne,  Moses  Kelley,  F.  T.  Backus, 
William  Bingham  and  Charles  Hickox. 

"One  by  one  they  have  departed,  and  successors  have  been  chosen 
until  for  several  years  past,  we  who  have  been  selected  to  fill  the 
vacant  places  have  with  one  accord  looked  to  Mr.  Bingham  as  the 
embodiment  of  all  of  the  good  that  has  been  accomplished  by  the 
Sinking  Fund  Commission  for  the  City  of  Cleveland.  He  has  been 
so  much  to  the  Commission. 

There  was  never  a  day  when  any  of  us  met  him,  that  the  wel- 
fare of  this  Commission  did  not  appear  to  be  in  his  mind.  No  man 
regarded  trust  more  truly  than  he  in  caring  for  the  funds  placed  in 


•«  A  biographical  sketch  of  Mr.  Bingham  up  to  the  time  he  became  a 
member  of  the  Commission  in  1862  is  given  on  pages  13-14,  note  33.  In  1873 
he  was  elected  to  the  State  Senate;  and  in  1876  declined  the  nomination 
as  Presidential  elector  on  the  Republican  ticket.  In  this  same  year  he  was 
appointed  a  member  of  the  Board  of  Indian  Commission  by  President 
Grant;  and  served  until  July  21,  1877,  when  he  resigned.  He  was  director 
of  several  Cleveland  banks  and  vice  president  of  the  Cincinnati,  Wabash 
and  Michigan  Railroad.  He  was  largely  interested  in  the  Cleveland  Rolling 
Mills.  He  was  a  man  of  fine  business  ability  who  was  ever  interested  in  all 
that  pertained  to  the  welfare  of  Cleveland.  He  was  the  first  President  ot 
the  Union  Club;  a  trustee  of  Case  Library  and  for  a  time  its  President;  and 
for  many  years  was  a  trustee  of  the  First  Presbyterian  Church.  He  was, 
too,  a  citizen  member  of  the  Loyal  Legion. 

"^  Mr.  Charles  W.  Bingham  was  born  in  Cleveland,  May  22,  1846.  He 
is  the  son  of  William  and  Elizabeth  (Beardsley)  Bingham.  He  studied 
at  Yale  and  was  one  of  the  "Wooden  Spoon  Men."  He  graduated  in  1868 
and  then  continued  his  studies  at  a  German  University.  He  is  President 
of  the  Perry-Payne  Company,  The  William  Bipgham  Company  and  The 
Standard  Tool  Company;  and  is  a  director  of  a  number  of  Cleveland  banks. 
He  is  interested  not  only  in  the  business  life  of  Cleveland,  but  in  the  intel- 
lectual as  well.  He  is  a  member  of  the  Board  of  Trustees  of  Case  School 
of  Applied  Science,  Western  Reserve  University  and  of  Case  Library,  and 
is  President  of  the  last  named  Board. 


54  History  of  the  Cleveland  Sinking  Fund  of  1862 

charge  of  himself  and  associates,  to  be  used  for  the  benefit  of  the 
City  of  Cleveland. 

It  is  perhaps  not  fitting  to  elaborate  upon  the  great  work  which 
the  Sinking  Fund  Commission  in  the  past  has  accomplished  for  the 
City,  but  it  is  at  least  proper  to  say  that  it  has  been  of  great  financial 
assistance  to  this  community.  We  can  imagine  no  higher  ideal  in  the 
carrying  out  of  a  trust  than  Mr.  Bingham's  life  and  work  in  per- 
forming his  duties  as  a  member  of  this  Commission.  Some  of  his 
associates  in  connection  with  his  work  in  the  Sinking  Fund  Com- 
mission have  known  him  ever  since  he  came  to  Cleveland ;  and  others 
for  a  less  time,  but  all  of  us  loved,  honored  and  respected  him.  In 
every  walk  of  life  Mr.  Bingham  was  a  grand  man,  a  good  citizen; 
one  who  lived  almost  four  score  years  and  ten,  maintaining  his  clear 
judgment,  his  fine  character  and  his  honorable  position  until  the  very 
close  of  his  life. 

We  desire  to  express  to  his  family  our  appreciation  of  their 
loss  and  the  loss  of  the  City  of  Cleveland,  in  the  death  of  our  asso- 
ciate, William  Bingham." 

At  this  meeting  of  May  16,  on  motion  of  Mr.  Everett,  seconded 
by  Mr.  Brush,  General  James  Barnett  was  elected  President  of  the 
Commission  as  successor  to  Mr.  Bingham;  and  at  the  meeting  oi 
November  1,  this  same  year  (1904)  President  Barnett  was  authorized 
by  resolution,  as  his  successors  had  been,  to  endorse  for  collection  all 
checks  or  drafts  made  to  the  order  of  the  Commission. 

In  Chapter  V®^  it  was  shown  how  the  Viaduct  and  General  Sink- 
ing Funds  passed  under  the  control  of  the  Commissioners  in  1879. 
The  litigation  begun  in  1897  has  been  set  forth  in  Chapter  VI. ®^  On 
October  22,  1902,  the  General  Assembly  passed  an  act  creating  a 
Board  of  Sinking  Fund  Trustees,  and  the  following  persons  were  ap- 
pointed :  John  F.  Whitelaw,  Samuel  E.  Dodge,  Demaline  Leuty,  and 
Frederick  C.  Howe.  As  a  result  of  the  organization  of  this  Board 
of  Sinking  Fund  Trustees,  the  Commissioners  of  the  Fund  of  1862 
at  a  meeting  held  August  25,  1903,  passed  the  following  resolution: 
"Whereas  by  Act  of  the  General  Assembly  of  the  State  of  Ohio 
passed  October  22,  1902,  a  Board  of  Sinking  Fund  Trustees  was  pro- 
vided for,  and  thereafter  such  Trustees  were  duly  appointed  and  quali- 
fied ;  and  Whereas  the  same  Trustees  have  heretofore  demanded  from 
the  present  Sinking  Commissioners  all  the  assets  and  property  in 
their  possession ;  and  Whereas  it  is  the  belief  of  the  Sinking  Fund 
Commissioners,  and  they  are  so  advised  by  counsel  that  the  said  Board 
of  Sinking  Fund  Trustees  is  not  entitled  to  the  property  and  assets  in 
the  possession  of  these  Sinking  Fund  Commissioners  under  and  by 
virtue  of  the  Act  of  1862,  but  are  entitled  to  the  assets  comprising 
the  "Viaduct  Sinking"  and  the  "City  Hall  Sinking  Fund,"  and 
Whereas  litigation  is  pending  for  the  purpose  of  determining  the 
obligations  and  duties  of  the  Sinking  Fund  Commissioners  with  refer- 
ence to  the  property  and  assets  in  their  possession  under  the  Act  of 

98  Page  24. 
09  Pages  38-48. 


History  of  the  Cleveland  Sinking  Fund  of  1862  55 

1862,  and  until  the  determination  of  such  litigation  these  Sinking 
Fund  Commissioners  are  unwilling  to,  and  will  not  transfer  said 
property  to  the  Board  of  Sinking  Fund  Trustees;  and  Whereas  the 
City  Council  of  the  City  of  Cleveland  has  passed  the  necessary  legis- 
lation (as  appears  in  this  record)  directing  and  authorizing  the  transfer 
of  the  property  and  assets  comprising  the  Viaduct  Sinking  Fund  and 
the  City  Hall  Sinking  Fund  by  the  Sinking  Fund  Commissioners  to  the 
Board  of  the  Sinking  Trustees: 

"Now,  therefore,  Be  it  Resolved,  That  the  President  of  the  Sink- 
ing Fund  Commissioners  be  and  is  hereby  authorized  and  empowered 
to  transfer  and  deliver  to  the  Board  of  Sinking  Fund  Commissioners 
all  of  the  property  and  assets  in  possession  and  control  of  this  com- 
mission, comprising  the  Viaduct  Sinking  Fund  and  the  City  Hall  Sink- 
ing Fund ;  and  that  he,  the  said  President,  be  and  he  is  hereby  further 
authorized  and  empowered  to  execute  all  necessary  instruments  of 
transfer  required  by  law  to  legally  transfer  to  and  vest  title  in  said 
Board  of  Sinking  Fund  Trustees,  to  the  above  mentioned  assets  and 
property,  and  to  do  any  and  all  things  incident  thereto;  all  in  accord- 
ance with  the  terms  and  provisions  of  the  ordinance  designated  as 
No.  42908,  passed  by  the  City  Council  of  the  City  of  Cleveland  on  the 
10th  day  of  August,  A.  D.  1903."  Three  days  later  the  assets  of  the 
Viaduct  Sinking  Fund  and  City  Hall  Sinking  Fund  were  transferred 
to  the  Board  of  Trustees  created  by  the  act  of  October  22,  1902. 

The  Commissioners  of  the  Fund  of  1862  gave  the  same  ability 
and  fidelity  to  the  care  of  these  funds  while  they  were  in  their 
charge  that  they  did  to  the  Fund  of  1862.  How  well  they  were  man- 
aged is  shown  by  the  following  tables  giving  total  assets  year  by  year 
during  the  time  the  Commissioners  had  charge. 

Total  Assets   of  Viaduct   Sinking  Fund  From  January   1,   1880  to 

August  28,  1903. 


January  1 
January  1 
January  1 
January  1, 
January  2, 
January  1 
January  1 
January  1, 
January  1, 
January  1, 
January  1 
January  1 
January  1 
January  1 
January  1 
January  1 
January  1 


1880 $   318,297.24 

1881 359,798.98 

1882 389,030.67 

1883 420,110.12 

1884 478,108.58 

1885 534,060.11 

1886 587,471.36 

1887 636,878.05 

1888 699,361.45 

1889 793,048.83 

1890 843,145.55 

1891 912,041.07 

1892 965,647.80 

1893 1,045,124.70 

1894 982,204.9998 

1895 960,197.41100 

1896 703,286.83101 


•»  In  this  year  the  Commissioners  paid  from  this  fund  into  the  City 
Treasury  the  sum  of  $102,988.75. 

100  Paid  into  the  City  Treasury  the  sum  of  $90,428.88. 

101  Paid  into  the  City  Treasury  the  sum  of  $384,278.00. 


56 History  of  the  Cleveland  Sinking  Fund  of  1862 

January  1,  1897 449,430.96i»2 

January  1,  1898 442,868.60io3 

January  1,  1899 197,447.60^04 

January  1,  1900 210,438.15 

January  1,  1901 224,788.96 

January  1,  1902 243,426.58 

January  1,  1903 281,396.58 

At  the  time  of  the  last  Annual  Report  of  the  Commissioners 
giving  an  accounting  of  this  Fund  they  had  assets  amounting  to  $281,- 
396.58.  During  the  years  from  January  1,  1894,  to  January  1,  1899, 
they  had  paid  into  the  City  Treasury  $1,177,579.63.  This  amount 
with  the  total  assets  January  1,  1903,  makes  a  grand  total  of  $1,458,- 
976.21.  When  the  Commission  took  charge  in  1879  they  had  as  is 
shown  by  their  first  annual  report,  January  1,  1880,  assets  to  the 
amount  of  $318,297.24.  Deducting  this  from  the  grand  total,  $1,458,- 
976.21,  we  have  as  net  gain  $1,140,678.97.  Evidently  the  Viaduct 
Sinking  Fund  had  been  managed  with  an  eye  signal  to  the  best  inter- 
ests of  the  City, 

The  General  Sinking  Fund  received  much  the  greater  part  of 
its  income  from  taxation.  The  money  thus  received  was  paid  out 
almost  immediately  to  pay  maturing  bonds  of  the  city,  and  there  was 
consequently  only  a  small  surplus  at  the  end  of  each  year.  The  Com- 
missioners performed  this  service  for  the  city  for  fourteen  years. 
In  their  fourteenth  annual  report  the  total  receipts  and  cash  balance 
are  given  as  $956.38.  On  October  10  (1892),  under  the  head  of 
cash  disbursements  we  find  that  this  sum  was  paid  into  the  City 
Treasury  on  certificate  of  the  City  Auditor. 

In  1895  the  Commissioners  took  charge  of  the  City  Hall  Sinking 
Fund.^*"^  Its  growth  during  the  years  it  was  in  charge  of  the  Com- 
missioners is  shown  by  the  following  table : 

January  1,  1896 $128,602.54 

January  1,  1897 191,063.81 

January  1,  1898 217,627.60 

January  1,  1899 349,076.50 

January  1,  1900 404,140.76 

January  1,  1901 527,728.60 

January  1,  1902 42S,154.24io6 

January  1,  1903 429,658.48io7 

This  Fund  passed  out  of  the  hands  of  the  Commissioners  in 
August,  1903.  During  the  time  it  was  under  the  management  of 
the  Commissioners  they  paid  into  the  City  Treasury  the  sum  of  $174,- 
200.00.    This  with  the  $429,658.48  makes  a  grand  total  of  $603,858.48. 

Beginning  with  January  1,  1904,  the  Commissioners  had  only  the 
Sinking  Fund  of  1862  to  care  for.    The  remaining  years  of  the  Com- 


102  Paid  into  the  City  Treasury  the  sum  of  $312,884.00. 
108  Paid  into  the  City  Treasury  the  sum  of  $25,000.00. 
10*  Paid  into  the  City  Treasury  the  sum  of  $262,000.00. 

105  See  page  48,  this  monograph. 

106  Paid  into  the  City  Treasury  $160,200.00. 
lOT  Paid  into  the  City  Treasury  $14,000.00 


History  of  the  Cleveland  Sinking  Fund  of  1862  57 

mission  are  characterized  by  the  expenditure  of  the  funds  for  the  in- 
terest of  the  city  and  by  a  judicious  management  of  the  balance  each 
year  so  as  to  produce  the  largest  possible  gain.  That  they  planned 
for  the  future  is  evident  from  the  following  letter  written  June  17, 
1905,  to  the  Mayor  and  the  City  Council : 

"By  an  act  of  the  General  Assembly  of  the  State  of  Ohio, 
passed  March  28,  1862,  Henry  B.  Payne,  Franklin  T.  Backus,  William 
Case,  Moses  Kelley  and  William  Bingham,  and  their  successors,  were 
constituted  Sinking  Fund  Commissioners  for  the  care  of  certain 
funds  to  be  used  eventually  as  provided  in  said  act  and  as  provided 
in  the  terms  of  the  annexation  of  Ohio  City  with  the  City  of  Cleve- 
land, by  virtue  of  which  it  was  provided,  among  other  things,  as 
follows : 

'6.  All  railroad  stocks  now  held  by  the  City  of  Cleveland,  and  all 
rights  growing  out  of  the  ownership  thereof,  and  of  such  as  have  hereto- 
fore been  owned  by  said  City  of  Cleveland,  shall  be  and  remain  the  exclu- 
sive property  of  that  portion  of  the  territory  of  such  united  city  which 
now  constitutes  the  City  of  Cleveland,  the  avails  of  which  shall  be  applied 
to  the  extinguishment  of  the  liabilities  of  said  City  of  Cleveland,  hereto- 
fore incurred  by  subscriptions  to  railroad  stocks,  and  the  issue  of  bonds 
or  other  liabilities  of  said  City  of  Cleveland,  in  payment  of  such  subscrip- 
tions. Should  a  surplus  remain,  after  the  application  of  so  much  of  the 
last-named  assets  to  the  extnguishment  of  the  said  last-named  liabilities, 
as  shall  be  necessary  for  such  purpose,  such  surplus  shall  be  appropriated 
to  the  special  benefit  of  said  territory  now  composing  the  City  of  Cleve- 
land, either  by  purchase  of  public  parks  therein,  or  in  such  other  manner 
as  a  majority  of  the  Trustees  representing  such  territory  shall  direct. 
Should  it  ever  be  necessary  to  resort  to  other  means  than  said  assets  to 
take  care  of  said  liabilities,  the  amount  necessary  for  such  purposes  shall  be 
raised  by  a  tax  upon  property  embraced  in  such  territory  exclusively.' 

The  undersigned,  with  Mr.  S.  T.  Everett,  who  recently  sailed 
for  Europe,  are  the  successors  duly  appointed  of  the  aforesaid  Sink- 
ing Fund  Commissioners.  Mr.  Everett  is  advised  of  this  action  now 
being  taken  on  the  part  of  the  undersigned  and  thoroughly  approves 
of  and  concurs  in  the  same. 

The  Sinking  Fund  Commissioners  have  something  more  than  two 
million  dollars  in  securities  in  their  possession  and  under  their  control, 
in  condition  to  be  used  now  for  the  purchase  of  public  parks  or  in 
such  other  manner  as  a  majority  of  the  Trustees  representing  the 
territory  of  the  City  of  Cleveland  prior  to  the  annexation  of  Ohio  City 
shall  direct. 

A  short  time  ago  the  Legislature  of  Ohio  created  another  Sink- 
ing Fund  Commission,  and  there  is  now  pending  a  controversy  in 
the  courts  as  to  whether  that  Sinking  Fund  Commission  has  any  juris- 
diction over  the  funds  in  the  hands  of  the  undersigned,  the  under- 
signed having  no  purpose  in  permitting  such  litigation  except  to  fully 
and  faithfully  carry  out  the  trust  imposed  upon  them. 

All  of  the  Sinking  Fund  Commissioners  have  been  very  much 
interested  in  the  park  system  of  the  City  of  Cleveland  and  in  the 
group  plan,  so-called,  whereby  it  is  proposed  to  build  the  county  court 
house  at  the  foot  of  Seneca  Street,  the  city  hall  at  the  foot  of  Bond 
Street,  and  open  up  in  connection  with  the  park  on  the  lake  front 


58 History  of  the  Cleveland  Sinking  Fund  of  1862 

west  of  Erie  Street,  a  grouping  of  public  buildings,  with  a  mall  ex- 
tending through  from  practically  the  center  of  the  group  plan  on 
either  side  of  Wood  Street  to  Superior  Street,  thus  insuring  in  con- 
nection with  the  park  system  an  enduring  grouping  of  the  public 
buildings  of  the  City  of  Cleveland. 

With  that  idea  in  view,  the  undersigned  have  had  repeated  con- 
sultation with  members  of  the  Trustees  of  Case  School  of  Applied 
Science,  owning  at  the  present  time  for  the  benefit  of  Case  School 
of  Applied  Science  the  property  on  which  the  present  city  hall  now 
stands,  the  old  Case  homestead  north  of  the  postoffice  building,  and 
other  properties  in  connection  therewith,  extending  substantially 
through  to  St.  Clair  Street,  as  shown  by  the  plat  herewith  presented. 
The  Trustees  of  Case  School  of  Applied  Science  have  also  sympathized 
with  the  park  system  and  group  plan  for  public  buildings  of  the  city, 
and  have  consented  to  sell  their  holdings  as  shown  by  the  plat  hereto 
attached. 

The  undersigned  have  also  consulted  the  Committee  of  Group 
Plan  of  the  Chamber  of  Commerce,  and  they  heartily  concur  in  the 
object  sought  to  be  obtained  by  the  undersigned  and  by  the  Trustees 
of  Case  School  of  Applied  Science. 

We  herewith  submit  to  you  correspondence  which  has  taken  place 
between  the  undersigned  and  the  Trustees  of  Case  School  of  Applied 
Science  and  also  correspondence  with  the  Committee  of  Group  Plan 
of  the  Chamber  of  Commerce,  together  with  the  action  of  the  Board 
of  Directors  of  the  Chamber  of  Commerce. 

It  is  proposed,  with  the  approval  of  yourselves — and  we  would 
like  the  approval  of  the  Mayor  and  the  unanimous  approval  of  the 
City  Council — if  the  plan  submitted  should  meet  your  views,  to  au- 
thorize us  to  pay  to  the  Trustees  of  Case  School  of  Applied  Science 
for  the  present  city  hall  property,  the  Case  Homestead  property,  and 
the  other  properties  extending  through  to  St.  Clair  Street,  as  shown 
upon  the  plat  herewith  presented,  from  the  funds  in  our  possession  as 
Sinking  Fund  Commissioners,  the  sum  of  one  million  nine  hundred 
thousand  dollars  ($1,900,000.00),  upon  receipt  of  which  the  Trustees 
of  Case  School  of  Applied  Science  will  convey,  or  cause  to  be  con- 
veyed, to  the  City  of  Cleveland  the  property  described  upon  the  plat, 
to  be  used  by  the  City  in  connection  with  its  park  system  and  group 
plan,  substantially  along  the  lines  of  the  group  plan  as  now  proposed. 

Portions  of  the  Case  property  are  now  occupied  by  tenants,  the 
City  itself  being  a  tenant  of  the  city  hall  property.  There  are  other 
tenants  paying  rent  upon  certain  portions  of  the  other  property  to  bq 
conveyed  to  the  City.  It  will  be  necessary  for  the  City,  whenever 
it  is  ready  to  do  so,  to  negotiate  for  or  appropriate  the  rights  of  such 
tenants.  Meantime  the  City  would  be  obtaining  the  income  from 
them. 

It  is  the  desire  of  the  Sinking  Fund  Commissioners  that,  when 
the  present  city  hall  ceases  to  be  occupied  for  that  purpose,  it  be 
torn  down,  and  either  the  entire  property  thrown  into  the  mall,  or 
some  suitable  building — preferably  a  public  library  building  as  a  part 
of  the  group  plan — ^be  located  where  the  present  city  hall  now  stands ; 


History  of  the  Cleveland  Sinking  Fund  of  1862 59 

the  property  in  the  rear,  running  through  to  St.  Clair  Street,  to  be 
used,  so  much  of  it  as  is  necessary  and  appropriate,  for  the  mall, 
with  such  other  public  buildings  placed  thereon  as  may  in  the  future 
be  deemed  proper. 

The  undersigned  would  respectfully  request,  if  the  Mayor  of  the 
City  of  Cleveland  approves  the  suggestion  herein  made,  that  the 
matter  be  approved  by  the  City  Council,  and,  when  approved  by  the 
City  Council  and  the  Mayor,  that  the  Director  of  Law  be  instructed 
to  take  such  action  as  shall  be  necessary  to  settle  the  pending  litigation 
so  far  as  the  $1,900,000.00  is  concerned,  and  to  enable  the  City  to 
receive,  for  the  purposes  herein  stated,  a  proper  conveyance  from 
the  Trustees  of  Case  School  of  Applied  Science  of  the  property 
herein  described. 

The  Sinking  Fund  Commissioners  express  their  readiness,  if  this 
shall  be  approved  and  this  property  accepted,  to  expend  the  remainder 
of  the  funds  in  their  possession  for  the  acquiring  of  other  additional 
real  estate  in  connection  with  the  group  plan,  as  the  Mayor  and  the 
City  Council  may  hereafter  approve." 

Previous  to  this  letter  the  Sinking  Fund  Commissioners  had  re- 
ceived a  letter  from  Mr.  J.  N.  Henderson,  President  of  the  Board  of 
Trustees  of  Case  School  of  Applied  Science  under  date  of  June  9,  in 
which  he  said  that  the  Trustees  were  willing  to  accept  the  proposition 
for  the  purchase  of  the  Case  property  referred  to  in  the  letter  of  the 
Commissioners  given  above  under  the  following  conditions : 

"1.  That  conveyance  of  the  properties  be  made  subject  to  all 
existing  leases  and  in  the  last  half  of  the  taxes  of  the  present  year. 

2.  That  a  period  of  sixty  (60)  days  from  the  date  hereof  be 
treated  as  a  reasonable  time  within  which  such  action  of  the  Mayor 
and  City  Council  shall  be  obtained,  and  if  not  obtained  within  that 
time,  this  acceptance  may  be  thereafter,  on  written  notice  to  you,  with- 
drawn. 

3.  That  payment  of  the  purchase  price  of  the  property  be  made 
in  securities  held  by  you  at  their  fair  market  price  to  such  extent  as 
we  may  be  able  to  agree  upon  the  amount  which  shall  represent  such 
market  price,  and  the  remainder,  if  any,  in  money." 

4.  That  the  transaction  when  concluded  shall  bear  date  as  of 
July  1,  1905,  all  rents  of  property  and  income  from  securities  accruing 
up  to  that  time  to  be  retained  by  the  present  owners,  and  such  as 
accrue  after  that  time  to  pass  with  the  properties,  as  well  as  interest 
at  the  rate  of  four  per  centum  (4%)  per  annum  upon  any  part  of 
the  purchase  price  for  which  securities  are  not  taken." 

As  a  result  of  these  negotiations  the  property  was  purchased  for 
one  million  nine  hundred  thousand  dollars.  This  was  paid  for  with 
securities  appraised  at  $1,754,898.50  and  $208,602.81  in  cash."'  A 
deed  of  the  property  was  made  and  given  to  the  City. 

At  a  meeting  of  the  Commission,  May  9,  1906,  at  which  the  mem- 
bers of  the  City  Council  were  present  there  was  discussion  as  to  how 
the  balance  of  the  funds  that  remained  after  paying  for  the  Case 

"*  A  statement  in  the  matter  of  the  purchase  of  certain  land  by  the 


60 History  of  the  Cleveland  Sinking  Fund  of  1862 

Estate  property  should  be  expended.  No  definite  conclusion  was 
reached.  It  was  suggested,  however,  that  the  money  be  used  for  the 
purchase  of  small  parks."®  On  December  26,  1906,  Mr.  D.  J.  Zinner, 
a  member  of  the  City  Council,  introduced  a  resolution  which  passed 
the  Council  and  was  approved  by  the  Mayor  directing  the  Commis- 
sioners to  pay  Moses  Watterson  sixty  thousand  dollars  for  the  can- 
cellation and  surrender  of  the  lease  held  by  him  on  a  certain  parcel 
of  the  land  which  had  been  purchased  by  the  Commission  for  the 
City  from  the  Trustees  of  Case  School  of  Applied  Science.  The 
resolution  also  provided  for  the  transfer  "by  said  Watterson  to  the 
City  of  Cleveland  of  the  building  situated  upon  said  parcel  of  real 
estate  free  from  air  lien,  encumberance  or  obligation."  This  resolu- 
tion was  signed  by  the  councilmen  of  the  original  seven  wards.^" 
On  January  21  (1907),  the  Commissioners  received  a  letter  from  the 
City  Solicitor,  Mr.  Newton  D.  Baker,  to  effect  that  Mr.  Watterson 
had  executed  "all  the  necessary  papers  for  the  cancellation  and  sur- 
render of  the  lease  and  sale  of  the  building  to  the  City" ;  and  that  he 
had  approved  the  bond  of  this  transaction,  and  would  be  satisfied  if 
the  Commission  would  pay  over  the  money  in  question  according  to 
the  terms  of  the  resolution  adopted  by  the  Council  and  approved  by 
the  Mayor.  On  the  next  day,  January  22,  the  money  was  paid  Mr. 
Watterson. 

The  next  meeting  of  the  Board  was  June  6,  1907.  Then  Mr.  C. 
W.  Bingham  presented  the  following  resolution,  which  was  unani- 
mously adopted:  "WHEREAS,  a  communication  from  Councilman 
A.  J.  Hirstius  has  been  presented  to  the  Sinking  Fund  Commissioners 
accompanied  by  a  duly  certified  copy  of  action  taken  by  the  School 
Board  of  the  City  of  Cleveland,  Ohio,  together  with  a  request  and 
direction  signed  by  all  of  the  Councilmen  representing  the  original 
seven  wards  of  the  City  of  Cleveland,  and  the  Councilmen-at-Large, 
also  a  certified  copy  of  the  resolution  passed  by  the  Council  of  the 
City  of  Cleveland  on  May  13,  1907,  approved  by  the  Mayor,  May  20, 
1907,  and  known  as  Resolution  No.  7906,  said  resolution  and  the 
instrument  signed  by  the  Councilman  requesting  the  Sinking  Fund 
Commissioners  to  pay  over  moneys  under  its  control  to  the  sum  of 

Sinking  Fund  Commissioners  of  1862,  in  behalf  of  the  City  of  Cleveland  of 

the  Case  School  of  Applied  Science: 

Purchase  price  of  the  property $1,900,000.00 

Value    of   invested   assets    turned    over    to    Case 

School  $1,754,898.50 

Interest  at  4%  to  present  date  on  difference  be- 
tween these  sums  from  July  1,  1905 5,320.38 

Interest  received   by   Commissioners   on   invested 

assets  after  July   1,    1905 57,594.57 

Interest  at  3  2-10%  to  July  1,  1906 586.36 

Cash  to  balance  in   full  payment 208,602.81 

$1,963,501.31     $1,963,501.31 

i'*^  Journal  of  the  Proceedings  of  the  Board  of  Sinking  Fund  Commis- 
sioners.    Minutes  of  the  meeting.  May  9,  1906. 

11°  See  terms  of  annexation  of  Ohio  City  to  City  of  Cleveland.  Appen- 
dix pp.  66-68. 


History  of  the  Cleveland  Sinking  Fund  of  1862 61 

Twenty-nine  Thousand  Two  Hundred  Fifty  and  no/lOO  Dollars 
($29,250.00)  to  the  various  parties  named  in  said  resolution  No. 
7906,  be  it, 

RESOLVED,  That  the  President  of  this  Commission  be  and  he 
is  hereby  authorized  to  pay  by  check  to  the  parties  named  in  said 
Resolution  No.  7906,  the  respective  amounts  therein  set  forth,  all 
aggregating  the  sum  of  $29,250.00,  upon  the  parties  making  to  the 
City  of  Cleveland  proper  conveyances,  which  shall  express  in  each  of 
them  that  the  lands  so  conveyed  to  the  City  of  Cleveland  are  to  be 
used  for  park  purposes,  and  all  of  said  conveyances  and  the  titles 
thereto  to  be  approved  by  Newton  D.  Baker,  City  Solicitor,  and  pay- 
ment to  be  made  upon  proper  certificate  from  him  that  the  title  is 
good,  and  that  the  conveyances  have  been  made  to  the  City  of  Cleve- 
land for  park  purposes,  and  that  everything  is  in  proper  and  legal 
shape  to  comply  with  the  resolution  of  the  City  Council  passed  May 
13,  1907,  and  with  this  resolution." 

As  early  as  April  15,  Mr.  Hirstius  had  addressed  a  letter  to  the 
Superintendent  of  the  Cleveland  Schools,^ *^  specifying  the  school 
grounds  in  his  ward  that  he  desired  to  enlarge.  He  desired  to  add 
one  hundred  feet  on  Central  to  the  Marion  School,  making  a  total 
area  of  forty  thousand  square  feet;  twenty-seven  feet  on  Waring 
Street  (East  31st  Street)  and  sixty-six  feet  on  Hulbert  Street  to  the 
Waring  School,  giving  an  additional  area  of  fifteen  thousand  square 
feet;  and  fifty  feet  on  Cedar  Avenue  with  a  depth  of  two  hundred 
feet  to  the  Sterling  School,  making  a  total  of  ten  thousand  square 
feet."* 

At  a  meeting  of  the  Board  the  13th  of  the  next  month^"  a  com- 
munication was  presented  from  the  City  Solicitor  asking  that  the  Com- 
missioners devote  thirty  thousand  dollars  to  assist  in  the  purchase  of 
"properties  known  as  the  Rini  property,  the  Bassishic  property,  the 
Heller  property  and  the  Newman  property,"  to  establish  a  park  within 

1^1  Proceedings  of  the  Board  of  Education,  April  IS,  1907.  Mr.  Hirstius' 
letter  to  Superintendent  Elson  was  under  the  same  date.  The  resolution 
passed  by  the  Council  and  signed  by  the  members  of  the  original  seven 
wards  was  under  date  of  April  18. 

^'2  In  July  from  the  8th  to  the  12th  the  following  persons  were  paid 
by  the  Commission  the  sums  set  opposite  their  name  for  the  purchase  of 
land   for  the  City  to  add  to  the  playgrounds  of  the   three  schools  above 
named: 
Yetta  Lavine  and  B.  Lavine  for  50  feet  of  land  on  Marion  Street 

joining  the    Marion   School $  8,500.00 

Mrs.   Margaret  A.    Phister  50  feet   on    Marion   Street 3,650.00 

Richard  H.  Curtain  and  others  for  property  known  as  lot  No.  36 
in  Hulbert  sub-division,  33  feet  on  the  west  side  of  Hul- 
bert Street   2.750.00 

Flora   Burke  for  property  known  as  187  Waring  Street,  27  feet 

on  Waring  Street    2,250.00 

Mary    Brosman    for   property   known   as    No.   S    Hulbert   Street, 

33  feet  on   Hulbert 2,100.00 

T.  O'Reilly  for  property  known  as  sub-lots  19  and  20  of  sub- 
division of  P.  Scovil,  100  feet  on  Central  Avenue 10.000.00 

Total    $29,250.00 

"•July  13,  1907. 


62  History  of  the  Cleveland  Sinking  Fund  of  1862 

the  original  seven  wards  of  the  city.  This  communication  was  ac- 
companied by  a  certified  copy  of  a  resolution  passed  by  the  Council 
and  signed  by  the  Councilmen  of  the  original  seven  wards.^^*  In 
compliance  with  this  request  the  Commissioners  passed  a  resolution 
authorizing  Mr.  Charles  F.  Brush,  the  chairman  of  that  meeting,  and 
Mr.  H.  C.  Hawkins,  the  agent  of  the  Commission  in  the  absence  of 
General  Barnett,  to  pay  the  thirty  thousand  dollars  for  these  prem- 
ises.^^'*  On  August  2  this  money  was  paid  into  the  City  Treasury. 
To  further  the  work  of  adding  to  the  parks  of  the  city  for  play-ground 
purposes  the  Commission  at  its  meeting  passed  four  resolutions  appro- 
priating a  total  of  $72,110. 

The  first  of  these  resolutions  provided  for  the  payment  of  $5,- 
600.00,  according  to  the  terms  of  a  resolution  introduced  by  D.  J. 
Zinner  and  adopted  by  the  City  Council,  March  9  (1908)."°  The 
second  resolution  authorized  the  payment  of  $19,940.00  to  acquire 
property  near  the  junction  of  Superior  Avenue  and  what  was  formerly 
called  Kirtland  Street."'^  The  third  resolution  authorized  the  pay- 
ment of  $18,420.00  for  the  purchase  of  property  on  Sterling  Court. 
This  was  to  be  paid  after  the  introduction  of  a  resolution  in  the  City 
Council  by  Mr.  E.  B.  Haserodt  in  June  (1908),  authorizing  same.^^® 
The  fourth  and  last  resolution  was  one  authorizing  the  payment  of 
$28,150.00  for  the  purchase  of  property  on  Putnam  Street.  This  reso- 
lution was  authorized  by  one  introduced  in  the  City  Council  by  Maurice 
Bernstein  and  passed  by  that  body  on  March  13,  1908,  and  approved 
by  the  Mayor  April  8.^^®  At  this  same  meeting  a  resolution  presented 
by  P.  J.  Henry  in  the  City  Council  requesting  the  expenditure  of 
$23,900.00  for  park  purposes  was  received.^^° 

11*  This  resolution  was  known  as  resolution  No.  8857  and  passed  the 
City  Council  July  8,  and  was  approved  by  the  Mayor  two  days  later. 

115  The  $30,000  was  expended  as  follows:  Rini  property,  $10,000;  Bas- 
sishic  property,  $12,000;  Heller  property,  $14,000.  The  Newman  property 
to  be  acquired  by  purchase  or  appropriation  by  the  City  of  Cleveland.  The 
excess  over  $30,000  to  be  paid  by  the  City  of  Cleveland.  The  resolution 
specified  that  the  Commissioners  should  pay  the  $30,000  to  the  Treasurer 
of  the  City  of  Cleveland. 

118  This  resolution  as  were  all  which  authorized  the  Commissioners  to 
purchase  land  for  park  purposes  was  signed  by  the  seven  Councilmen  of 
the  original  seven  wards. 

ii'^  This  resolution  was  authorized  by  a  resolution  introduced  by  Mr. 
Haserodt  in  the  City  Council  March  9,  and  approved  by  the  Mayor 
March  11. 

118  This  property  was  paid  for  June  12,  1908.  Payments  were  made 
by  the  City  Treasurer  to  the  following  persons  in  the  amounts  set  oppo- 
site their  names:  John  S.  Stevens,  $6,720;  Anna  Clark,  $5,900;  Margaret 
Conway,  $2,600;  John  and  Mary  Oberle,  $2,900,  and  J.  F.  McKenna  for 
services  rendered  in  procuring  options  upon  the  property,  $300;  total, 
$18,420.  On  the  same  date  there  was  forwarded  to  the  Treasurer  check 
for  $5,600  as  authorized  by  the  Zinner  resolution. 

119  The  $28,150  authorized  under  the  Bernstein  resolution  was  paid  May 
1,  1908,  and  went  to  the  City  Treasury  for  the  following  persons  in  the 
amounts  set  opposite  their  names:  Bessie  Dennish,  $4,000;  David  Regar, 
$4,050;  Isador  Wohl,  $7,400;  Samuel  Rosen,  $6,500  and  Max  Rubin,  $6,200. 

120  The  money  under  the  Henry  resolution  was  paid  June  9  and  went 
to  the  following  persons:  David  M.  Ryan,  $5,700;  John  O'Laughlin,  $3,500; 
Katherine  Mallin,  $3,700;  Thomas  Bolger,  $3,000;  Delia  W.  Gregory,  $3,000; 
and  Mary  Brennan,  $5,000;  total  $23,900. 


History  of  the  Cleveland  Sinking  Fund  of  1862  63 

On  August  31,  this  same  year  (1908)  a  resolution  was  intro- 
duced in  the  City  Council  by  Mr,  N.  Gribben  requesting  the  expenditure 
of  $27,115.00  of  the  Sinking  Fund's  money  for  the  purchase  of  land 
for  park  purposes.  A  resolution  was  offered  by  Mr.  Squire  and  sec- 
onded by  Mr.  Brush  authorizing  the  President  of  the  Commission  to 
turn  over  to  the  City  Treasurer  checks  drawn  to  the  order  of  the 
various  vendors  of  the  land  to  be  purchased  by  the  City  to  the 
amount  above  stated."^  On  November  23  the  City  Council  passed 
a  resolution  introduced  by  Mr.  Samuel  Kramer  authorizing  the  pur- 
chase of  a  tract  of  land  from  Mr.  J.  H.  Wade  for  $20,000.  This  was 
paid  January  27,  1909. 

The  annual  report  of  the  Commission  showed  for  the  year  a 
balance  of  $132,893.28  and  expenditures  for  land  for  park  purposes, 
$76,070.00.  The  expenses  for  the  year  were  $1,055.  In  1909  the 
interest  received  monthly  on  bank  balances  amounted  to  $3,103.78, 
making  a  total  with  the  balance  on  hand  January  1,  1909,  of  $135,- 
997.06.  During  the  year  1909,  including  the  $20,000  paid  J.  H.  Wade, 
January  27,  they  expended  for  land  for  park  purposes  $47,115.00. 
The  expenses  for  the  year  were  $721.64,  leaving  a  balance  of  cash  on 
deposit  January  1,  1910,  of  $88,160.42.  In  this  year  (1910)  to  pur- 
chase land  for  park  and  group  plan  purposes  from  Sherwood  B.  Pot- 
ter and  John  Dyer  Potter,  the  Commissioners  appropriated  $25,000. 

Besides  the  land  purchased  from  the  Potters  the  Commission 
under  a  resolution  of  June  1,  appropriated  $31,850.00  for  park  pur- 
poses. Their  expenses  during  the  year  were  $511.50.  From  interest 
they  received  $1,631.50.  On  January  1,  1911,  there  was  a  balance  on 
hand  of  $32,430.42. 

A  vacancy  occurred  in  the  Commission  on  January  13,  1911,  in 
the  death  of  General  James  Barnett  who  had  served  since  September 
22,  1890.  General  Barnett  succeeded  J.  H.  Wade.  After  the  death  of 
Mr.  William  Bingham  he  was  elected  President  of  the  Commission. 
At  the  next  meeting  of  the  Commission,  June  4,  1912,  on  motion  of 
Mr.  C.  W.  Bingham,  seconded  by  Mr.  Andrew  Squire  the  following 
testimonial  was  unanimously  adopted : 

"In  the  death  of  General  James  Barnett  this  city  and  State  has 
sustained  a  great  loss.  He  was  a  great  soldier ;  a  great  philanthropist ; 
and  a  great  citizen." 

As  a  soldier  he  served  the  entire  time  of  the  Civil  War  and  took 
part  in  the  battles  of  Shiloh,  Corinth,  Stone  River,  Murfreesboro,  Chicka- 
mauga,  Missionary  Ridge  and  Nashville,  winning  high  praise  from  both 
General  Rosencranz  and  General  Thomas.  When  the  war  had  ended  he 
retired  from  the  army  with  the  rank  of  Brigadier  General  and  with  the 
unostentation  so  characteristic  of  him  returned  to  his  business  and  his 
civic  duties. 

As  a  philanthropist  he  was  a  man  of  broad  sympathies,  who  gave  gen- 
erously and  wisely.     His  wise  counsels  and  material  help  did  much  for 

^21  These  vendors  and  the  amount  each  received  were  as  follows:  Mrs. 
Kate  Kennedy,  $5,500;  Layura  J.  Ross,  $2,915;  James  Duffin,  $2,750;  Mrs. 
Elizabeth  Strode,  $2,850;  Mrs.  Susan  Wilke,  $3,600;  Mrs.  S.  Krueger,  $3,500; 
The  Cleveland  Trust  Company,  $2,500;  Mrs.  C.  Bahls,  $1,800;  Mrs.  A. 
Wagner,  $1,700;  total,  $27,115. 


64  History  of  the  Cleveland  Sinking  Fund  of  1862 

the  upbuilding  of  the  institutions  of  philanthropy  in  this  city.  For  many 
years  he  was  President  of  the  Associated  Charities,  and  also  the  Humane 
Society. 

As  a  citizen  he  was  ever  interested  in  the  moral,  intellectual  and  ma- 
terial development  of  this  city,  and  was  ever  willing  to  give  of  his  time 
and  his  abilities  to  contribute  to  their  advancement.  In  1865,  on  appoint- 
ment by  Governor  R.  B.  Hayes,  he  served  as  Police  Commissioner  of  the 
Metropolitan  Police;  he  was  one  of  the  early  directors  of  the  Soldiers 
and  Sailors  Orphans  Home  at  Xenia;  and  for  seven  years  one  of  the 
directors  of  the  Cleveland  Asylum  for  the  Insane.  He  was  too,  a  trustee 
of  Case  Library,  and  for  a  time  President  of  its  Board  of  Trustees;  a 
trustee  of  Western  Reserve  Historical  Society,  and  a  member  of  this 
Commission  since  1890.  He  was  faithful  in  every  trust;  beloved  by  those 
who  knew  him;  and  universally  esteemed  by  the  citizens  of  Cleveland. 

We  of  this  Commission,  which  he  served  for  twenty-one  years  and 
of  which  he  was  President  from  1904  till  his  death,  desire  to  express  our 
appreciation  of  his  ability,  his  wise  counsels,  and  his  valued  services;  and 
to  testify  to  the  personal  esteem  and  affection  in  which  we  his  colleagues 
held  him,  and  to  the  personal  loss  we  have  sustained  in  the  death  of  this 
good  man, — our  friend. 

At  this  same  meeting  on  motion  of  Mr.  Andrew  Squire,  seconded 
by  Mr.  Charles  F.  Brush,  Mr.  C.  W.  Bingham  was  elected  President 
of  the  Commission  to  succeed  General  Barnett. 

During  the  year  1911  the  Commission  received  $1,166.43.  This 
with  the  $32,430.42,  the  balance  on  hand  January  1,  made  a  total 
of  $33,596.85.  The  expenses  for  the  year  were  $505.00,  leaving  a  bal- 
ance January  1,  1912,  of  $33,091.85.  The  work  of  the  Commission 
was  practically  complete  when  on  June  4  of  this  year  (1912)  the 
Secretary,  Mr.  E.  W.  Brink,  was  authorized  to  turn  over  to  the  City 
Solicitor  of  the  City  of  Cleveland  $32,500  in  checks  payable  to  the 
vendors  of  land  purchased  by  the  city  for  park  purposes."'^ 

On  June  30,  1913,  the  Commission  forwarded  to  the  City  Council 
its  report  for  the  half  year  ending  on  that  date.  This  showed  a  com- 
plete distribution  of  all  funds.  The  report  was  approved  by  the  City 
Council,  November  5,  and  by  the  Mayor  November  7.  The  work  of 
the  Commission  was  now  finished  and  in  accord  with  its  resolution  of 
June  30,  it  adjourned  sine  die.^^* 

The  Commission  had  been  in  existence  a  half  century.  It  began 
with  assets  to  the  amount  of  $361,377.52.  This,  however,  was  only 
nominal  as  the  stock  of  the  Cleveland  and  Pittsburg  Railroad  Com- 
pany were  included  at  par.  As  has  been  stated"*  this  stock  when  sold 
realized  but  $42,537.50,  making  the  real  assets  on  January  1,  1863, 
$332,059.07.    With  this  amount  as  a  basis  the  Commissioners  by  hus- 


^2*  Journal  of  Proceedings  of  Sinking  Fund  Commissioners. 

123  Page  16  this  monograph. 

"*  At  the  meeting  of  the  Commission,  June  30,  1913,  it  was  "Resolved,  that 
upon  the  submission  of  a  copy  of  this  report  to  and  its  approval  by  the  City 
Council,  the  Mayor  of  the  City  of  Cleveland  and  the  councilmen  of  the  original 
seven  wards,  which  approval  is  requested,  and  upon  entering  upon  the  minutes 
of  the  Secretary  of  the  action  of  the  City  authorities  evidencing  such  approval, 
this  Commission  then  stand  adjourned,  sine  die." — Journal  of  the  Proceedings 
of  Board  of  Sinking  Fund  Commissioners. 


History  of  the  Cleveland  Sinking  Fund  of  1862  65 

banding  their  resources  and  by  wise  and  judicious  investments  caused 
it  to  grow  into  more  than  four  and  a  half  million  dollars.  The  fol- 
lowing table  shows  the  total  and  the  uses  made  of  the  Fund : 

Water  Bonds  redeemed  and  cancelled $   925,000.00 

House  of  Correction   Bonds  cancelled 40,000.00 

City's   Debt  assumed  and   paid 468,696.51 

City's  share  of  repaying  streets 725,587.90 

For  fire  department  purposes 55,477.22 

For    bridge    construction 87,742.13 

Land  purchased  from  Case  School  of  Applied  Science  for  park 

system  and   group  plan 1,900,000.00 

To  Moses  Watterson  for  cancellation  and  surrender  of  lease..  60,000.00 

For  school  parks  at  Marion,  Waring  and  Sterling  Schools 29,250.00 

1906  Park  purposes    59,250.00 

1907  Park  purposes    72,110.00 

1908  Park  purposes    76,070.00 

1909  Park  purposes    47,836.64 

1910  Park  purposes    56,850.00 

1912  Park  purposes    32,500.00 

$4,636,370.40 

It  is  doubtful  if  anywhere  else  in  the  History  of  American  Cities 
a  parallel  to  this  undertaking  can  be  found.  It  is  pre-eminently  to  the 
credit  of  Cleveland  that  such  a  work  could  be  done;  and  too  much 
cannot  be  said  in  commendation  of  the  men  who  accomplished  it. 
They  were  conservative  business  men  who  without  remuneration  gave 
their  time  and  their  abilities  because  of  civic  pride  to  accomplish  this 
work  for  future  generations ;  civic  patriotism  of  the  highest  type  and 
of  the  kind  that  should  have  emulation  in  other  American  cities  alone 
explains  their  fidelity  to  their  trust  and  gives  promise  of  like  good 
work  from  others  in  the  future. 


APPENDIX 

TERMS  OF  ANNEXATION  OF  OHIO  CITY  TO  THE 
CITY  OF  CLEVELAND 

This  memorandum  of  an  agreement  made  this  fifth  day  of  June, 
lA.  D.  1854,  by  and  between  W.  A.  Otis,  H.  V.  Wilson,  and  F. 
T.  Backus,  as  commissioners  appointed  by  the  city  council  of  the  city  of 
Cleveland,  and  W.  B.  Castle,  N.  M.  Standart  and  C.  L.  Rhodes  as  com- 
missioners appointed  by  the  City  of  Ohio,  to  arrange  the  terms  and  con- 
ditions of  the  annexation  of  the  said  city  of  Ohio  to  the  said  city  of 
Cleveland,  in  pursuance  of  the  vote  taken  in  that  behalf  by  said  cities 
respectively,  at  the  annual  election  held  therein,  on  the  first  Monday 
in  April  last,  Witnesseth:  that  said  commissioners,  the  former  acting 
in  behalf  of  said  city  of  Cleveland,  and  the  latter  acting  in  behalf  of 
said  city  of  Ohio,  have  agreed  upon  the  following  terms  and  c6ndi- 
tions  upon  which  such  annexation  shall  take  place,  to  wit: 

The  territory  now  constituting  the  city  of  Ohio  shall  be  annexed 
to  and  constituted  as  a  part  of  the  city  of  Cleveland,  and  the  first,  sec- 
ond and  fourth  wards  of  the  former  city,  as  now  established,  shall 
constitute  the  eighth,  ninth,  tenth  and  eleventh  wards  respectively,  of 
the  last  named  city,  and  the  present  trustees  of  the  said  wards  of  the 
city  of  Ohio,  respectively,  shall  hold  their  office  as  such  trustees  of  said 
eighth,  ninth,  tenth  and  eleventh  wards  of  said  city  of  Cleveland 
respectively,  for  the  terms  for  which  they  have  been  severally  elected 
as  such  trustees  of  said  first,  second,  third  and  fourth  wards,  but  the 
boundaries  of  said  wards  may  be  changed,  or  the  number  thereof  may 
be  increased  or  diminished,  subject  to  the  provisions  contained  in  the 
next  following  articles. 

2. — The  number  of  wards  into  which  the  territory  so  annexed 
shall  be  divided,  shall  not,  before  the  first  Monday  of  April,  A.  D. 
1858,  bear  a  less  ratio  to  the  whole  number  of  wards  into  which  said 
united  city  of  Cleveland  shall  be  divided,  than  four  to  eleven ;  nor 
shall  such  number  ever  bear  a  less  ratio  to  the  whole  number  of  wards 
in  the  City  of  Cleveland  than  the  population  of  such  territory  shall 
bear  to  that  of  the  whole  city. 

3. — All  assets,  both  real  and  personal,  owned  by,  or  in  any  man- 
ner belonging  to  the  city  of  Ohio,  shall  vest  in,  and  become  the  prop- 
erty of  the  said  city  of  Cleveland,  to  be  held  by  the  latter  for  the 
purposes  contemplated  in  the  original  acquisition  of  the  same  power 
of  disposal  over  them  as  though  the  same  had  been  originally  acquired 
for  the  like  purposes  by  the  said  city  of  Cleveland. 

4. — All  the  assets,  both  real  and  personal,  other  than  railroad 
stocks,  and  rights  growing  out  of  the  same,  owned  by  or  in  any  man- 
ner belonging  to  the  city  of  Cleveland,  as  now  constituted,  shall  be  the 
property  of  said  united  city,  to  be  held  for  the  purposes  contemplated 


History  of  the  Cleveland  Sinking  Fund  of  1862  67 

in  the  original  acquisition,  but  with  the  same  power  of  disposal  over 
the  same,  as  though  they  had  been  originally  acquired  for  the  like  pur- 
poses by  said  united  city  of  Cleveland. 

5. — That  the  outstanding  debts  and  liabilities  of  every  kind  of 
the  said  city  of  Ohio,  including  the  amount  to  be  paid  for  the  purchase 
of  water  lot  number  eighteen,  as  authorized  by  said  city  council,  and 
those  of  the  said  city  of  Cleveland,  other  than  such  as  have  been 
incurred  by  the  latter  by  way  of  subscriptions  to  railroad  stocks,  shall 
be  provided  for  and  liquidated  by  the  said  united  city  of  Cleveland. 

6. — All  the  railroad  stock  now  held  by  the  city  of  Cleveland,  and 
all  rights  growing  out  of  the  ownership  thereof,  and  of  such  as  have 
heretofore  been  owned  by  said  city  of  Cleveland  shall  be  and  remain 
the  exclusive  property  of  that  portion  of  the  territory  of  such  united 
city  which  now  constitutes  the  city  of  Cleveland,  the  avails  of  which 
shall  be  applied  to  the  extinguishment  of  the  liabilities  of  said  city 
of  Cleveland,  heretofore  incurred  by  subscriptions  to  railroad  stocks, 
and  the  issue  of  bonds  and  other  liabilities  of  said  city  of  Cleveland, 
in  payment  of  such  subscription.  Should  a  surplus  remain  after  the 
application  of  so  much  of  the  last  named  assets  to  the  extinguishment 
of  the  said  last  named  liabilities  as  shall  be  necessary  for  such  purpose, 
such  surplus  shall  be  appropriated  to  the  special  benefit  of  said  terri- 
tory now  composing  the  city  of  Cleveland,  either  by  the  purchase  of 
public  parks  therein,  or  in  such  other  manner  as  a  majority  of  the 
trustees  representing  such  territory  shall  direct.  Should  it  ever  be 
necessary  to  resort  to  other  means  than  said  assets  to  take  care  of  said 
liabilities,  the  amount  necessary  for  such  purpose  shall  be  raised  by  a 
tax  upon  the  property  embraced  in  such  territory  exclusively. 

7. — The  united  city  of  Cleveland  shall  commence  and  complete 
as  soon  as  practicable,  but  not  later  than  the  first  day  of  June,  A.  D. 
1856,  a  bridge  over  the  Cuyahoga  river,  at  the  foot  of  Superior  street 
in  the  city  of  Cleveland,  or  at  some  suitable  point  further  north,  the 
particular  location  of  which  shall  be  designated  by  the  council  of  said 
united  city,  as  a  public  highway  for  the  accommodation  of  the  inhabi- 
tants of  the  territory  embraced  in  the  said  city  of  Ohio  and  the  said 
city  of  Cleveland,  sufficient  and  suitable  for  the  crossing  of  said  river 
with  teams,  carriages  and  other  vehicles;  and  the  council  of  such 
united  city  shall  pass  all  such  ordinances  as  may  be  necessary  to  ensure 
the  completion  of  such  bridge  on  or  before  said  first  day  of  June, 
A.  D.  1856,  and  such  other  bridges  and  crossings  shall  be  provided 
from  time  to  time  as  the  convenience  of  the  citizens  may  require  and 
the  council  direct. 

8. — Upon  the  consummation  of  such  annexation,  all  the  general 
ordinances  of  said  city  of  Cleveland  now  in  force  shall  be  extended  to 
and  enforced  over  the  entire  territory  of  the  city  of  Cleveland,  as  it 
shall  then  be  constituted,  and  the  general  ordinances  of  the  said  city 
of  Ohio  shall  be  repealed ;  provided,  however,  that  the  same  shall 
continue  in  full  force  as  far  as  shall  be  necessary  for  the  enforcement 
of  rights  or  liabilities  that  shall,  before  that  time,  have  accrued  under 
the  same.     The  local  ordinances  of  said  city  of  Ohio  shall  be  and 


68  History  of  the  Cleveland  Sinking  Fund  of  1862 


remain  in  full  force  until  repealed  or  modified  by  the  city  council  of 
said  united  city;  but  no  such  repeal  shall  take  place  of  such  of  said 
ordinances  as  provide  for  local  improvements  to  be  made  by  the  levy 
of  special  taxes ;  and  it  shall  be  the  duty  of  such  city  council  to  make 
such  further  provisions  as  shall,  from  time  to  time,  be  necessary  for 
the  purpose  of  completing  such  local  improvements  and  supplying  any 
defect  that  may  be  found  in  said  ordinances. 

9. — Upon  such  consummation,  all  appointments  heretofore  made 
by  the  city  council  of  said  city  of  Cleveland,  of  existing  boards  of 
management  of  every  kind,  committees  and  officers,  shall  terminate, 
and  said  united  city  council  shall  re-appoint  such  boards,  committees 
and  officers,  and  in  such  new  appointments  proper  regard  shall  be  had 
to  the  territory  so  annexed  to  said  city.  The  terms  of  office  of  such 
officers  as  have  been  elected  by  the  people  of  the  last  named  city  shall 
continue  the  same  as  though  such  annexation  had  not  taken  place ;  and 
such  officers  shall  hold  the  same  relation  to  said  united  city  that  they 
have  heretofore  held  to  the  city  of  Cleveland;  and  the  officers  of  the 
said  city  of  Ohio  of  every  kind  other  than  trustees,  shall  deliver  over 
to  the  corresponding  officers  of  said  united  city,  on  demand,  all  moneys, 
records,  books,  vouchers,  claims  and  property  of  every  kind  and  de- 
scription in  their  hands  or  under  their  control  as  such  officers  taking 
duplicate  receipts  therefor,  one  of  which  shall  be  filed  by  them,  respec- 
tively, with  the  auditor  of  the  united  city. 

10. — As  soon  as  practicable  after  the  consummation  of  such  an- 
nexation, the  city  council  of  such  united  city  shall  pass  all  such  ordi- 
nances as  may  be  necessary  or  proper  to  carry  into  effect  all  the  terms 
and  conditions  in  this  agreement  of  annexation  mentioned  and  set 
forth. 

In  witness  whereof,  the  said  commissioners  have  hereunto  set 
their  hands,  the  day  and  year  first  above  mentioned. 

H.  V.  WILSON, 
F.  T.  BACKUS, 
Commissioners  on  behalf  of  the  city  of  Cleveland. 
WM.  B.  CASTILE, 
CHAS.  L.  RHODES, 
Commissioners  on  behalf  of  the  city  of  Ohio. 


^  YD  01448 


313681 


UNIVERSITY  OF  CAUFORNIA  UBRARY 


I    i 


m 


m\m 
'in, 


iinii! 


